In an unusually crowded week for monetary policy, central banks representing nearly half of the world’s ten most-traded currencies are about to shape borrowing costs for the final stretch of 2025. At the centre of attention is the Federal Reserve, which is widely expected to deliver the first US interest-rate cut since Donald Trump returned to the White House.

A 36-Hour Policy Blitz

The action begins with the Bank of Canada, followed by the Fed mid-week, then the Bank of England on Thursday and the Bank of Japan on Friday. Together these meetings will either adjust rates or signal intentions for the last quarter of the year. By the week’s end, policy affecting two-fifths of global output will have been tweaked or reaffirmed.

Markets are especially focused on Washington. Trump’s calls for cheaper credit have been colliding with Fed Chair Jerome Powell’s concerns about tariff-driven inflation. Yet signs of a softening labour market have given policymakers enough cover for a widely anticipated 25-basis-point reduction.

Political Pressure Meets Market Expectation

Analysts at Bloomberg Economics expect the Fed to trim rates not because inflation and employment targets are comfortably met, but because markets have priced in a cut and the White House is pressing for one. Powell’s move may also be aimed at shielding the Fed from further political interference.

Canada and Norway are projected to mirror the Fed’s quarter-point adjustment. In contrast, the Bank of England is likely to stand pat after August’s split decision, while the Bank of Japan continues to hint at tightening but without a firm timeline.

Economic Data Under the Microscope

Before the Fed announces its decision, fresh US retail-sales figures will offer a final read on consumer strength. A forecast 0.3% gain in August would follow two months of robust spending, but questions linger over how long households can keep up in the face of higher prices and a fragile job market. Weekly jobless-claim numbers on Thursday will be another barometer of labour conditions.

Asia’s Heavy Data Week

China kicks off with a wave of August indicators — from retail sales and industrial production to property metrics — that will show whether targeted stimulus is stabilising demand. India, Pakistan, Japan and Singapore also release trade and growth figures, while Australia posts its jobs report and New Zealand its GDP.

Friday belongs to Tokyo. Japan’s CPI and the BOJ policy decision are expected to confirm steady rates but could reveal clues about a future shift as inflation stays above target.

Europe Watch

The UK publishes inflation data just ahead of the BOE meeting, with the headline rate seen at 3.8% and a possible minority push for another cut. Officials are also expected to slow the pace of unwinding crisis-era bond holdings to ease recent market volatility.

Elsewhere, Switzerland’s export numbers, Italy’s credit rating review by Fitch, and ratings updates for Greece and France will all shape investor sentiment.

Trade Tensions Simmer in the Background

Amid this monetary-policy storm, US and Chinese negotiators meet in Madrid for fresh economic talks. Beijing has just launched two investigations into the US semiconductor sector, underlining how geopolitical frictions continue to cast a shadow over global trade.

Why It Matters

With so many major central banks acting within a 36-hour window, investors are bracing for volatility across currencies, bonds and equities. The Fed’s move, in particular, will set the tone for the remainder of the year — not just for US borrowers but for policymakers worldwide weighing growth risks against inflation pressures.

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