The Week Ahead: Federal Reserve, Bank of England, ECB, BOJ rate decisions come against backdrop of Middle East war and rising inflation fears

Traders are asking how high can oil go if the Middle East conflict continues. No one really knows. In the meantime, we start to get a feel for the policy response as the full range of major central banks are in action with interest rate decisions. The Federal Reserve, Bank of England, European Central Bank, Bank of Japan, Reserve Bank of Australia, Bank of Canada and Swiss National Bank are all in action amid a packed economic calendar.

Here’s the key events to watch over the next week.

Monday, 16 March

Watch for gap opens in oil and stock futures on Sunday night with markets susceptible to volatility after the weekend and any developments in the Middle East war.

Nvidia’s GTC, the firm’s global AI conference, is held in San Jose, California, running through March 19, with CEO Jensen Huang delivering a keynote speech.

US Empire State manufacturing and industrial production figures are the major economic releases.

Earnings: Standard Life FY results.

Tuesday, 17 March

The Reserve Bank of Australia is the first of the major central banks in action this week and could set the tone for global bond markets with a hike to interest rates. Westpac has raised its forecast to a 25bps in March and another in May as the RBA responds to inflationary pressures.RBA Governor Michele Bullock will hold a press conference
following the central bank’s policy decision.

Earnings: Trustpilot and Prudential FY25 results, Close Brothers H1 2026 results.

Wednesday, 18 March

Fed day: the FOMC is expected to stand still on rates as it awaits incoming data. As energy prices and inflation fears rise, expectations for Federal Reserve rate cuts this year are dwindling. Traders have taken a September rate cut off the table and now see just one solitary cut by December. Given the assumption of no change at this meeting, the key for markets will be to judge how the Fed views the impact of the war in the Middle East on inflation and the labour market. Markets will be watching for a steer on what the reaction function is likely to be, albeit a new Fed chair is incoming.

Elsewhere the Bank of Canada is expected to leave rates on hold. US producer price inflation and Eurozone consumer price inflation are the major economic data points.

Earnings: Micron provides a fresh look at the AI chip space.

Thursday, 19 March

A very busy schedule for central banks. The Bank of England had been expected to cut rates at this meeting but markets have effectively priced this out since the war in the Middle East begun and raised energy prices and inflation concerns. Markets have started to price in rate hikes this year although a poll of economists by Reuters indicated they expect the BoE to cut twice this year. They expect the Bank leave rates unchanged this week and cut in April or June, suggesting that the inflationary impulse from higher oil prices could be short-lived, and/or that the hit to growth and the softening labour market outweighnear-term inflation worries. The key for UK assets – gilts and sterling especially – will be what kind of signal the Bank wants to send about its reaction function to higher oil prices and inflation – leaning dovish or hawkish?

Elsewhere, the Bank of Japan is expected to hold rates this week but it is expected to pull the trigger on another hike in April. Rising inflation pressures from higher oil prices is a particular concern for the industrial-heavy economy which imports almost all its crude from the Gulf. It comes as Japanese Prime Minister Sanae Takaichi is scheduled to meet President Donald Trump in Washington for her first official visit to the US since winning a landslide election earlier this year.

The ECB is also set to keep rates steady. President ChristineLagarde holds a press conference in which markets will look for clues about the central bank’s reaction function to rising inflation pressures. The indications from a number of policymakers is that the ECB is ready to tamp down on inflation quickly. Meanwhile the Swiss National Bank President Martin Schlegel speaks after the central bank’s rate decision, which is expected to remain unchanged at 0%.

Earnings come from Accenture and FedEx.

Friday, 20 March

The week comes to a close with the quadruple witching in US markets, as stock-index futures and options, as well as single-stock options and futures, all expire. Before this China is scheduled to update its key 1yr and 5yr lending rates.