Rate hikes by year-end

RBNZ: 55 bps (99% probability of rate hike at the next meeting)

ECB: 41 bps (98% probability of rate hike at the next meeting)

BoJ: 37 bps (67% probability of rate hike at the next meeting)

RBA: 27 bps (51% probability of rate hike at the next meeting)

BoE: 26 bps (84% probability of no change at the next meeting)

Fed: 26 bps (65% probability of no change at the next meeting)

BoC: 13 bps (98% probability of no change at the next meeting)

SNB: 5 bps (97% probability of no change at the next meeting)

The basis-point figures capture the cumulative change in policy rates markets are pricing in by year-end, while the probabilities refer to the odds of a move at each central bank's next scheduled meeting. The spread — from 55 basis points of expected tightening in New Zealand to just 5 in Switzerland — illustrates how unevenly investors expect policy paths to diverge across major economies.

Last week's market pricing

Looking at last week's pricing, market expectations remained largely unchanged for most central banks, with the exception of the RBA and the BoC.

In Australia, the hawkish repricing was driven by the monthly CPI report released on Wednesday. The Trimmed Mean CPI year-on-year came in at 3.6%, above the expected 3.5% increase. More notably, the monthly reading rose 0.5%, well above economists' forecast of 0.3%. The Trimmed Mean, which strips out the largest price rises and falls each month, is the RBA's preferred gauge of underlying inflation, and at 3.6% it sits above the bank's 2–3% target band — the backdrop that pushed the implied odds of a hike at the next RBA meeting just above even.

In Canada, the repricing was dovish after US-Canada trade talks collapsed and 50% tariffs on $27.6 billion of Canadian goods took effect. Canada then responded with retaliatory “dollar-for-dollar” tariffs on US goods. The Bank of Canada had previously warned that a trade war would weigh on economic growth and justify a less hawkish stance.

Today's main event is Fed Chair Warsh's speech at the Jackson Hole Symposium. The annual gathering hosted by the Kansas City Fed in Wyoming has historically served as a stage for policy signals — Ben Bernanke used his 2010 remarks to lay the groundwork for a second round of quantitative easing, and Jerome Powell unveiled the Fed's average inflation targeting framework there in 2020. After the Treasury buyback announcement and Treasury Secretary Scott Bessent's “verbal” intervention to suppress long-term yields, traders will be focused on whether Warsh pushes back against the recent easing in financial conditions.

If he does not, the current “debasement” trades — so-called wagers against the purchasing power of fiat currency, including long precious metals, bitcoin, and short US dollar positions — could extend further. If he does push back with language such as “recent easing in financial conditions, if sustained, could complicate the process of returning inflation to our target” or “if recent easing threatens progress toward price stability, we will not hesitate to respond appropriately,” the market may tighten financial conditions again and extend the pullbacks in those trades.

Warsh is scheduled to speak at 14:00 GMT/10:00 ET. Prepared remarks are typically released moments before, or at the same time as, the Fed Chair's speech. Beyond Jackson Hole, the forces that moved this week's pricing — Australian inflation data and the North American trade dispute — remain the variables to watch for the RBA and the BoC.

Related reading: How have interest rate expectations changed after this week's events? | AUD higher as Australian CPI beats forecasts, core inflation surprises to the upside | US weighs further trade escalation after Canada sets retaliatory tariffs