How have interest rate expectations changed after this week's events?NewsGiuseppe Dellamotta04/09/2026 | 10:54 GMT, published 04/09/2026 at 10:54 AMTagsmarket overviewAdd as a preferredsource on GoogleSummaryThe RBNZ, BoC and the Fed saw the most notable shifts in market pricingRate hikes by year-endECB: 46 bps (99% probability of rate hike at the next meeting)2027: 73 bps BoJ: 42 bps (75% probability of rate hike at the next meeting)2027: 111 bpsFed: 33 bps (50% probability of rate hike at the next meeting)2027: 46 bpsRBA: 30 bps (69% probability of rate hike at the next meeting)2027: 32 bpsBoE: 26 bps (91% probability of no change at the next meeting)2027: 66 bpsBoC: 26 bps (67% probability of no change at the next meeting)2027: 99 bpsRBNZ: 25 bps (76% probability of no change at the next meeting)2027: 86 bps SNB: 5 bps (99% probability of no change at the next meeting)2027: 44 bpsLast week's market pricing hereThe 2027 pricing indicates the total amount of tigthening expected by the end of 2027, not how much is expected in 2027 alone.The most notable shifts in market pricing happened on the RBNZ, BoC and the Fed side.
The RBNZ raised interest rates by 25 bps as expected but the statement contained less hawkish language, and the new OCR projections were left mostly unchanged. Relative to expectations, the overall decision was more dovish than expected. In fact, in July, the meeting minutes accompanying the statement said "the Committee agreed that while further OCR increases appear likely at upcoming meetings, their timing is highly uncertain".
This week, they said "future policy will depend on the Committee’s judgement of the balance of risks to medium-term inflation. This approach allows the Committee to observe and assess the effects of reduced monetary stimulus". This indicates that there's less appetite for tightening.
The BoC left interest rates unchanged as expected but the statement contained a more hawkish language. The central bank removed the reference to the policy rate being "appropriate" in the statement and warned that upside risks to inflation have increased. Governor Macklem surprisingly downplayed the recent US tariffs and noted that businesses have adjusted to tariffs and uncertainty.
In the previous meetings, the BoC noted that US tariffs were important for policy decisions. The market interpreted the decision as more hawkish than expected. Lastly, there's been lots of volatility in Fed interest rate pricing since Warsh's speech at the Jackson Hole Symposium.
Following his hawkish speech, the odds for a rate hike in September rose to 67%, but then stabilised around 60%. Fed Governor Waller yesterday triggered a dovish repricing, lowering the probabilities to 50%. While he adopted a more hawkish stance at the beginning of the summer, yesterday he sounded less inclined to raise rates.
He said that he has finally been seeing signs of disinflation and added that he would not want to raise rates into a disinflationary environment. He said he would be willing to wait another month to “give disinflation a chance”. He also mentioned that the September rate decision will depend on the upcoming CPI report.
If the data comes in hot, he would consider a rate hike.ADVERTISEMENT - CONTINUE READING BELOWAdvertisementAdvertisementMust ReadAdam Button on Gold, Market Noise and Risk | What Traders Need to Know Before Q4Why risk management in trading matters if you want to stay in the gameEuropean stock market open: Relief bounce lifts stocks, but higher bond yields keep the pressure onUSD/INR continues to follow oil prices in lockstep as focus shifts to US-Iran negotiations. What's next?
This Nasdaq 100 technical analysis slightly favors the bears for todayGold breaks key support, slides below $4,230 as danger zone gives wayGoldman: US diesel export ban would cut US prices about 4%, lift European cost (d'uh)Gold futures technical analysis and an important trade management for lifeGold selloff pauses as US-Iran talks revive deal hopes. What to watch next?Silver remains at risk of further downside as US-Iran talks take centre stageEuro area economic sentiment slips in September as inflation expectations riseIran expects US response today on Hormuz proposal as oil prices climb againS&P 500 technical analysis as week ended less than 1% lower than ATH just shy of 7850ADVERTISEMENT - CONTINUE READING BELOWAdvertisementBest in 2026SponsoredGeneral Risk WarninginvestingLive is a market news and analysis platform that lists and reviews forex brokers for informational use only.
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