Global central banks signal further rate hikes as Iran war stokes inflation

Sep 17, 2026 14:03 (36d ago)

Major central banks raised rates or signaled further increases as the Iran war pushed energy prices and inflation expectations higher.
The BOJ raised rates to a 31-year high, oil futures moved above $100 a barrel, mortgage rates approached 7%, and 16 of 18 Federal Reserve policymakers projected at least one more quarter-point hike by year-end.
The yen weakened despite Japan's rate increase, while the Fed, ECB and BoE faced higher bond yields, household costs and market expectations for additional tightening.

A potential new global interest-rate tightening cycle is emerging as the Iran war pushes oil, gas, fuel and borrowing costs higher, increasing inflation and affordability risks despite resilient growth. The Bank of Japan raised rates to a 31-year high on Friday after a Federal Reserve increase two days earlier and a European Central Bank move the previous week, while the Bank of England held rates but warned that prolonged conflict could require further action. The yen continued weakening against the U.S. dollar despite the BOJ's tighter policy, prompting debate over whether larger-scale buybacks may be needed to stabilize the currency.