Fed, BOJ Dominate Rate Week for Almost Half the Global Economy

-- Investors may glean more on the Federal Reserve’s resolve to ease and how close Japan is to finally exiting negative interest rates as central banks set policy for almost half the global economy.A $2 Billion Airport Will Test Modi’s Mission, Adani’s AmbitionsWant to Be ‘Certified Crypto Expert?’ You Need 11 Hours and $229

The Bank of Japan’s announcement on Tuesday is also pivotal. The prospect that it’s moving toward finally raising borrowing costs and effectively calling an end to a generation-long period of feeble price growth points to how tectonic plates are shifting in another key member of the global financial system.

The raises outpaced inflation in a positive sign for households that have seen real wages fall every month for almost two years. Economists are divided on whether the central bank will move Tuesday or not. Over in Europe, Iceland may begin easing with a quarter-point cut from 9.25% — the highest level in Western Europe — according to lender Islandsbanki hf. Slowing inflation and a long-term pay deal may provide officials with reassurance against a potential wage-price spiral.

Against the backdrop of strong job growth and a jump in prices in January and February, officials have repeatedly emphasized they’re in no rush to ease. The institution’s board, led by President Roberto Campos Neto, may shorten the horizon on current guidance, which signals cuts of “the same magnitude in the next meetings” after three straight above-forecast inflation prints.

Bank of England policymakers will have fresh inflation data on Wednesday and the latest purchasing manager surveys on Thursday to consider before their decision, which is seen likely to keep rates unchanged again. Investors will also closely watch Turkey’s rate decision after February’s inflation numbers came in higher than expected. Several banks, including JPMorgan, say monetary officials will probably raise the key rate beyond its current level of 45%, though most doubt that will happen until after this month’s local elections.

Later on, Colombia’s central bank is all but certain to cut the current 12.75% rate for a third straight meeting — and may opt to go bigger after consecutive quarter-point reductions.

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