Federal Reserve announces the leadership and objectives of its task forces to advance the conduct of monetary policy

Japan finance minister Katayama: gradual interest rate rises expected as government pursues active fiscal policy Japan Finmin Katayama: BoJ can modify monetary policy irrespective of government opinion

Ms Schnabel started her presentation by noting that, since the Governing Council's previous monetary policy meeting on 29-30 April 2026, euro area financial markets had been torn between two competing developments: the unresolved conflict in the Middle East and the global artificial intelligence (AI) boom. The continued disruption to shipping in the Strait of Hormuz had reinforced expectations that oil prices would remain higher for longer, despite markedly lower near-term oil prices. Inflation fixings had declined from their high April readings but continued to hover above 3% for 2026 and above 2% for 2027. In tandem with oil prices, ECB rate expectations had moderated somewhat. However, markets still priced in around three interest rate hikes overall, while the median response in the ECB Survey of Monetary Analysts was an expectation of only two hikes. Although the war was weighing on growth expectations in the euro area and globally, investors’ risk appetite had remained strong. A key underl ECB ACOUNTS: HEADLINE INFLATION WAS SET TO RISE FURTHER OVER THE SUMMER AND REMAIN WELL ABOVE TARGET INTO THE FIRST HALF OF 2027, DESPITE ALMOST THREE 25 BASIS POINT INTEREST RATE HIKES BEING EMBEDDED IN THE PROJECTIONS ECB ACOUNTS: ALL MEMBERS VIEWED THE RISKS SURROUNDING THE INFLATION OUTLOOK AS BEING TO THE UPSIDE RELATIVE TO THE STAFF BASELINE PROJECTIONS ECB ACOUNTS: IF ENERGY PRICES DID NOT DECLINE AS IMPLIED BY THE FUTURES CURVES, ABOVE-TARGET INFLATION WAS LIKELY TO PROVE CONSIDERABLY MORE PERSISTENT ECB ACOUNTS: MORE ATTENTION WAS LIKELY TO BE PAID TO PRICE RISES NOW THAN AT THE TIME OF THE PREVIOUS ENERGY SHOCK, AND THIS COULD MEAN THAT FIRMS AND WORKERS MIGHT REACT MORE QUICKLY ON THIS OCCASION.

BoJ set to keep interest rates unchanged in July but maintain policy guidance pledging to continue raising rates - Sources BoJ may revise up fiscal 2026 economic growth forecast in quarterly report due in July, keep focus on risk of inflation overshoot - Sources.