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Consensus for Wednesday’s Federal Reserve decision is 4%. The top of the range sits at 3.75% today, so the base case going in is a rise. The Bank of England follows on Thursday lunchtime and the Bank of Japan overnight into Friday, where consensus is 1.25% against 1% now. That is 3 decisions inside 48 hours, and all 3 arguments are about going up. British inflation lands on Wednesday morning, about 29 hours before the Bank of England votes.
Last Week:
US Consumer Price Index (August) Headline inflation held at 3.4% on the year and rose 0.4% on the month, both in line with forecasts. Core rose 0.29% on the month against 0.22% expected, and petrol did more than a third of the monthly increase on its own. Futures pricing for a rise on Wednesday moved to between 85% and 90%, from about 70% before the release.
Bank of England at the Treasury Committee Governor Andrew Bailey told MPs that the market curve for higher rates carries a risk premium for a worse energy outcome rather than a hidden Bank plan, and that any move still depends on the data and on geopolitics. The rates market prices a 25% chance of a rise on Thursday, with a full quarter point priced for November and another for December.
Oracle Q1 (quarter to 31 August) Revenue grew 30% to $19.3 billion against $19.13 billion expected, adjusted earnings came in at $1.92 a share against $1.75, and the contracted backlog reached $664 billion. The shares gave up a 6% intraday gain and closed Friday down 1.74% at $150.28, because capital spending has gone to $28.50 billion from $8.50 billion a year earlier and free cash flow is running at minus $5.4 billion.
The setup: payrolls added 162,000 jobs in August against a 56,000 forecast, producer prices ran at 5.4% on the year, and core inflation then came in a tenth above consensus. A central bank that wanted a reason to wait no longer has one. Wednesday’s projections are the first since June, when the median official had 3.8% for the end of this year, 3.6% for 2027, 3.4% for 2028, 3.1% for 2029 and 3.1% in the long run.
Week at a Glance
🔴 US Federal Reserve Rate Decision: Wednesday, 2:00 PM ET / 7:00 PM BST
🔴 CLARITY Act Senate Cloture Vote: Tuesday, 2:15 PM ET / 7:15 PM BST
🔴 UK Consumer Price Index (August): Wednesday, 2:00 AM ET / 7:00 AM BST
🔴 Bank of England Rate Decision: Thursday, 7:00 AM ET / 12:00 PM BST
🔴 Bank of Japan Rate Decision: Friday, no scheduled announcement time
🟠 US Retail Sales (August): Wednesday, 8:30 AM ET / 1:30 PM BST
🟠 UK Labour Market Overview: Tuesday, 2:00 AM ET / 7:00 AM BST
🟠 Triple Witching and the S&P 500 Rebalance: Friday, All day
🟠 China Activity Data (August): Monday 10:00 PM ET / Tuesday 3:00 AM BST