All eyes on Warsh as rate-hike fever spreads across G7 central banks

The global monetary policy landscape is set to undergo significant changes in the coming week as central banks across the Group of Seven (G7) prepare to make key decisions on interest rates. The Federal Reserve's decision, led by Chairman Kevin Warsh, will be closely monitored following a higher-than-expected core inflation reading on Friday.

This has sparked investor speculation that the Fed may raise interest rates, potentially defying President Donald Trump's preferences. The Bank of England is also expected to increase rates on Thursday, although this is not guaranteed. The Bank of Japan is widely predicted to raise its key rate at the end of the week, following robust data including a significant wage increase in Japan in nearly three decades.

The Middle East conflict and soaring oil prices have raised concerns about the sustainability of global price pressures. European Central Bank officials have already tightened monetary policy twice since the Iran conflict, and the Bank of Canada is also moving in a hawkish direction. The Federal Reserve's forthcoming decisions will be crucial, as a failure to raise rates would undermine Warsh's credibility.

Investors are expecting the FOMC to act, and if they don't, Warsh risks losing credibility in the eyes of market participants. Other notable economic data to watch in the coming week includes Chinese industrial data, UK and Canadian inflation numbers, India and Japan's economic reports, and Brazil's probable rate cut.