The Federal Reserve, European Central Bank and Bank of Japan headlined a pivotal week for central banks, with US and European policymakers opting for additional interest-rate hikes.
The Fed and ECB both lifted borrowing costs by a quarter of a percentage point while keeping options open for their next meetings in September. In Japan, the central bank made a surprise decision to loosen its yield curve control policy — a pillar of its effort to suppress interest rates and stimulate the economy. That stoked speculation of more drastic changes to the country’s ultra-low borrowing costs.