Weekly Market Recap & Calendar: Hot CPI Pushes Fed Hike Odds Higher, Fed/BoE/BoJ Week Ahead (14–18 Sep 2026)

Stocks ended lower last week as hotter-than-expected U.S. inflation and surging oil prices pushed Treasury yields higher and increased expectations for a Federal Reserve rate hike. The week opens today with Canada’s August CPI, while the main focus is ahead: the Federal Reserve, Bank of England and Bank of Japan all have policy decisions scheduled this week. All times below are in GMT.

Last Week’s Market Snapshot

Key Developments Last Week

• Oil above $100 intensified inflation concerns: Rising crude prices added to concerns that higher energy costs could keep inflation elevated and make the Federal Reserve more cautious about future monetary policy.
• August CPI came in hot on core inflation: Headline CPI increased 0.4% MoM and 3.4% YoY, while Core CPI rose 0.3% MoM, above the 0.2% market forecast. The stronger core reading helped push expectations for a September Fed hike sharply higher.
• Stocks finished the week lower despite a Friday rebound: The Dow, S&P 500 and Nasdaq all suffered losses for the week, although U.S. equities rebounded on Friday as investors digested the inflation data and the outlook for Federal Reserve policy.
• ECB raised rates again: The European Central Bank raised its key interest rates by 25 basis points on Thursday, taking the deposit rate to 2.50%. This was the ECB’s second rate hike of 2026. Policymakers also raised their inflation and growth projections amid higher energy prices.
• Small caps and bonds came under pressure: The Russell 2000 fell around 2.4% for the week, while rising Treasury yields increased borrowing-cost pressure across rate-sensitive assets. The U.S. 10-year Treasury yield reached around 4.97%.

This Week: Three Major Central Banks

Biggest Event to Watch: FOMC Rate Decision – Wednesday, 6:00 PM GMT

After August’s hotter-than-expected core CPI and the sharp rise in oil prices, markets are pricing roughly an 87% probability of a 25-basis-point Fed rate hike at this week’s meeting. Several major banks, including Goldman Sachs and JPMorgan, now expect the Federal Reserve to raise rates in September.

The updated Summary of Economic Projections will be closely watched for clues about how policymakers see inflation, growth and the future path of interest rates. Fed Chair Kevin Warsh’s press conference will also be important, particularly for signals about whether the September move would be a one-off adjustment or the beginning of a broader tightening cycle.

• Hike with a hawkish outlook: Could support the USD while putting additional pressure on bonds and rate-sensitive equities.
• Hike but dovish guidance: Could limit the USD reaction and potentially provide relief for equities and bonds if the Fed signals that further hikes are not imminent.
• Surprise hold: Would challenge current market pricing and could trigger significant volatility across the USD, Treasury yields and equities.

With the Bank of England and Bank of Japan also announcing policy decisions this week, traders should prepare for potentially elevated volatility across USD, GBP and JPY. A Fed hike combined with a BoJ hike would be particularly important for USD/JPY, as the interest-rate differential between the two economies could shift.

Key Takeaway for Traders

This is a major central-bank week for global markets. The Fed is the main focus after the latest inflation data, while the BoE and BoJ decisions could create additional volatility in GBP and JPY pairs. Traders should pay close attention not only to the rate decisions themselves, but also to the guidance provided by each central bank about future policy.

Risk note: A week with multiple major central-bank decisions can produce unusually sharp and layered volatility across currencies, equities and bonds. Always use proper risk management. This content is for informational purposes only and does not constitute financial advice — forex and CFD trading involves significant risk of loss.