Top 5 things to watch in markets in the week ahead
Investing.com — The week will be dominated by central bank meetings, with the Federal Reserve and the European Central Bank both poised to deliver rate hikes, while the Bank of Japan stands pat. A rally in U.S. equities markets faces an inflection point and oil looks set for more gains amid concerns over the supply outlook.
With the Fed all but certain to raise interest rates again at the conclusion of its latest policy setting meeting on Wednesday, investors are focusing their attention on whether this is likely to be the final hike of its tightening cycle.
The Fed paused rate hikes in June after increasing its policy rate by 500 basis points since March 2022, when it kicked off its fastest monetary policy tightening cycle in more than 40 years in a bid to combat spiraling inflation.
Investors have mixed views on the central bank's longer-term monetary policy outlook.
Analysts at Goldman Sachs said Friday that while they expect this hike to be “the last” of the long-running tightening cycle they believe the Fed will ultimately choose to «remain more hawkish than market pricing.»
«The key question is how strongly [Fed] Chair [Jerome] Powell will nod toward the 'careful pace' of tightening he advocated in June, which we and others have taken to imply an every-other-meeting approach.»
The ECB is widely expected to deliver another 25-basis point rate hike at its upcoming meeting on Thursday, so all eyes are on the central bank’s plans for September, with markets divided on whether there will be another hike or a pause.
Inflation in the eurozone has cooled since hitting a peak of 10.6% in December but still remains well above the ECB’s 2% target. The ECB has said inflation was «projected to remain too high for too long» and
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