Based on recent surveys and forecasts from multiple institutions, professional analysts largely anticipate that the Federal Reserve and the Bank of England will keep interest rates unchanged for the remainder of 2026, while the European Central Bank and the Bank of Japan are more likely to implement further hikes. This divergence in expectations primarily stems from differing inflation trajectories, growth prospects, and policy communication approaches across these economies.

According to an August survey conducted by institutions, respondents continued to predict that the Fed and the BoE would stay on hold, whereas the ECB and the BoJ retain room for rate increases within the year.

Federal Reserve: Majority Expect No Change for the Year

Goldman Sachs Chief Economist Jan Hatzius has explicitly stated that the market is still pricing in excessive tightening, and inflation data is more likely to continue improving rather than deteriorating again. Consequently, Goldman Sachs expects the Fed to maintain rates unchanged for the remainder of 2026. In the survey conducted from August 12 to 17, 80 out of 104 economists (approximately 77%) predicted no rate hike for the full year, with 94 expecting the September meeting to hold the current rate range of 3.50%–3.75%. Institutions such as State Street also believe recent inflation data is sufficient to support the Fed staying put at least through year-end. Market pricing has already shifted the next rate hike expectation significantly to early 2027, indicating a convergence of views between analysts and traders.

Bank of England: Holding Steady Becomes the Consensus View

On the UK front, Vanguard Senior Economist Shaan Raithatha noted that with cooling inflation, slowing wage growth, and a decline in services inflation, Vanguard no longer anticipates rate hikes and expects policy rates to remain unchanged through 2026–2027. In the August survey, 56 out of 64 economists (nearly 90%) predicted the BoE would hold its rate at 3.75% for the entire year, with none expecting any adjustment at the September meeting. HSBC UK Economist Elizabeth Martins and Morgan Stanley UK Chief Economist Bruna Skarica both emphasized that limited evidence of second-round effects is a key rationale supporting the decision to remain on hold.

ECB and BoJ: Rate Hike Expectations Persist

In contrast to the US and UK, analysts hold a more hawkish outlook for the ECB and the BoJ. Markets and institutions broadly expect the ECB may continue raising rates within the year to address inflation risks following the energy price shock. Regarding the BoJ, most analysts believe there is still room for further policy normalization, with a high probability of a rate hike this year. The final August survey summary directly states that the Fed and BoE will remain unchanged, while the ECB and BoJ carry expectations for hikes. This divergence reflects the different growth-inflation dynamics challenges faced by the euro area and Japan.

Market Interpretation and Risk Points

The current consensus is built on the foundation of gradually moderating inflation and slowing but not collapsing growth. Should upcoming data—particularly US PCE and UK wage/services inflation—show greater stickiness, or if geopolitical risks push energy prices higher, analysts could quickly revise up their rate hike probabilities. Conversely, if the labor market weakens further, it could open the door for discussions on rate cuts. Overall, professional forecasters are fairly aligned on the "no change for the year" view for the Fed and the BoE, while expectations for hikes in Europe and Japan are more divergent and data-dependent. Investors need to closely track this week's PCE data and Jackson Hole speeches to verify whether this consensus remains robust.