BOJ Plans July 2027 Policy Meeting, Hikes Possible

The Bank of Japan’s calendar for next July keeps a window open for hawkish board members to vote before their terms end, reinforcing the possibility of future rate hikes as inflation persists. Markets and observers expect the BOJ to raise rates as soon as September and potentially pursue a more aggressive path, with talks of lifting the policy rate toward 1.75%–2% under the normalization cycle. In the United States, Fed President Alberto Musalem argues that inflation running around 2.5%–3% is too high and supports pre-emptive tightening even if policy remains neutral or accommodative, highlighting upside risks to inflation. The Fed’s sentiment index staying firmly above neutral signals continued hawkish pricing, with markets likely to assign a non-trivial probability of further tightening. Overall, markets appear to anticipate limited chances of imminent rate cuts, as rhetoric and data keep policymakers focused on preventing inflation from rebounding.