New York:Major central banks in the United States, Europe, and Japan are preparing to tighten monetary policy in December. This move follows a period in October where these banks maintained a cautious approach, despite ongoing inflationary pressures.

According to Anadolu Agency – English, the US Federal Reserve, the European Central Bank (ECB), and the Bank of Japan did not change their interest rates in October. However, the continued rise in inflation and energy prices has increased the pressure for further rate hikes. In the United States, the Federal Reserve's decision to keep its policy rate within the 3.75%-4% range was influenced by stronger-than-expected economic growth and high consumer spending.

The Federal Reserve, in a vote of 10-2, maintained its current rates, but Fed Chair Kevin Warsh commented on the persistently high inflation levels. This has led money markets to anticipate a 73% probability of a 25-basis-point rate hike on December 9. In Europe, the rising costs of oil and natural gas, driven by Middle Eastern tensions, are contributing to inflationary pressures. The ECB faces an 87% probability of increasing rates in December, influenced by hawkish signals from President Christine Lagarde, who has announced her early departure in February 2027.

The Bank of England is expected to implement a 25 basis point increase in its policy rate, with further hikes anticipated in the coming months. Similarly, the Bank of Japan, which held its rates steady at 1.25% at the end of October, is expected to tighten monetary policy further. Governor Kazuo Ueda's recent remarks hint at a policy reassessment, aligning with market expectations for another rate hike.