Global Interest Rate 'Super Week' This Week... Key Decisions by the US and Major Central Banks

Fed Expected to Cut Rates by 0.25 Percentage Points
Canada to Lower, While UK and Japan Hold Steady Among G7

This week marks a "super week" for interest rates, as major economies around the world, including the United States, are set to make key decisions on their monetary policies. Starting with Canada, four of the Group of Seven (G7) countries-namely the United States, the United Kingdom, and Japan-along with other nations representing two-fifths of the global economy, will determine their interest rate policies.

On September 14 (local time), Bloomberg News predicted that the biggest issue this week would be whether the United States will cut its interest rates.

Reuters Yonhap News

President Donald Trump has repeatedly pressured Federal Reserve Chairman Jerome Powell to lower interest rates. While Chairman Powell has maintained a cautious stance, citing the need to monitor the effects of the Trump administration's tariff policies, recent signs of weakness in the labor market have increased the need for a rate cut.

Economists at Bloomberg Economics expect the Federal Reserve to cut rates by 0.25 percentage points at this Federal Open Market Committee (FOMC) meeting. They stated, "The market expects a rate cut, and the White House wants it as well. Chairman Powell is believed to be taking the necessary steps to prevent further threats to the Fed's independence."

According to the CME FedWatch tool from the Chicago Mercantile Exchange, the federal funds futures market reflected a 96.4% probability that the Fed would cut its current 4.25%-4.5% rate by 0.25 percentage points in September, and a 3.6% probability of a 0.5 percentage point cut.

If the Fed proceeds with a rate cut, it would be the first time since President Trump took office and the first rate reduction in nine months since last December.

This move will impact monetary policies in other countries, including South Korea. If the Fed cuts rates by 0.25 percentage points as expected, the interest rate gap between South Korea and the United States-which currently stands at a record-high 2 percentage points-will narrow.

Bloomberg also forecast that Canada and Norway are likely to cut rates by a similar margin as the United States.

However, the United Kingdom and Japan are widely expected to keep rates unchanged. The Bank of England (BOE) made its last rate cut decision by a narrow 5-4 vote last month. Nikkei reported that the earliest the Bank of Japan (BOJ) might raise rates would be October, and that within the BOJ, there is a strong view that the impact of U.S. tariff policies on the Japanese economy should be closely monitored.

Bloomberg further projected that central banks in countries such as Indonesia, Brazil, and South Africa will likely keep their rates unchanged while closely watching market developments.

This content was produced with the assistance of AI translation services.