Central Bank Policy Tracker September 2026

Economics Research 20 September 2026 | 6:45PM EDT

n Recent policy changes: Global central banks have mostly either held or hiked Jan Hatzius | policy rates over the last three months, with DMs hiking on average and EMs Goldman Sachs & Co. LLC

mostly on hold. In DMs, no central banks lowered and 83% raised rates over the Joseph Briggs | last three months (GDP-weighted average), while, in EMs, 12% cut rates and 8% Goldman Sachs & Co. LLC raised rates over the same period. Our Global Financial Conditions Index (GS FCI) Sarah Dong has tightened by 20bp over the last three months, reflecting tightening in both | Goldman Sachs & Co. LLC DMs (+20bp) and EMs (+24bp). At the country level, financial conditions have Megan Peters tightened the most in South Korea (+168bp), Turkiye (+53bp), and Australia | Goldman Sachs International (+39bp) and eased the most in Brazil (-73bp), Russia (-63bp), and Switzerland (-50bp). n Forecast updates: We have made several policy rate forecast revisions over the last 30 days. In the US, we raised our end-2026 and end-2027 forecasts by 50bp each, to 4.125% and 3.625% respectively. We also raised our terminal forecast for the US by 25bp to 3.375%. In the UK, we raised our end-2026 forecast by 25bp to 4.0% and our end-2027 forecast by 75bp to 3.75%. In the Euro Area, we added another 25bp hike in December to reach 2.75% by end-2026 and raised our terminal rate forecast by 25bp to 2.25%. We also revised up our forecasts in Australia (+25bp to 4.6% in 2026, +50bp to 4.1% in 2027) and Japan (+25bp in both years, to 1.25% and 1.75%). Elsewhere, we raised our end-2026 forecasts in Hungary (+50bp) and South Africa (+25bp), but lowered them in Israel (-25bp), Kazakhstan (-25bp), Indonesia (-25bp) and Brazil (-25bp). n Current forecasts: We forecast that global central banks will keep policy rates broadly unchanged at 3.4% (on a GDP-weighted basis) over the next four quarters, with rates rising through 2027Q1 before easing later in 2027. We expect that DM central banks will raise policy rates by 14bp on average over the next four quarters, reflecting hikes in Japan (+50bp), Sweden (+50bp), the Euro Area (+25bp), the UK (+25bp), Canada (+25bp) and New Zealand (+25bp), which are partly offset by net reductions in Australia and Norway (+25bp in September but -50bp of cuts in 2027) and the US (another +25bp in December followed by -50bp of cuts in 2027). We expect that EM central banks will cut rates by 17bp on average, reflecting 101bp of cuts in CEEMEA and around 70bp in Latin America, but 3bp of hikes in EM Asia. n Forecasts relative to consensus and current pricing: Our end-2026 policy rate forecasts are dovish relative to market pricing (our forecasts are below pricing in

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Goldman Sachs Central Bank Policy Tracker

all DMs and 80% of EMs; above in no DMs and 20% of EMs) but are hawkish relative to consensus globally (below consensus in 35% and above in 53% of economies). n Balance sheet policy: Balance sheets as a share of GDP remain particularly elevated relative to their 2019 levels in New Zealand (8pp higher) and Australia (3pp), with the US (+2pp) and Canada (+2pp) also modestly above. In contrast, balance sheets as a share of GDP have normalized below pre-pandemic levels in Switzerland (-14pp), Japan (-6pp) and Sweden (-6pp). In the UK, the MPC has set out a plan to wind the £488bn APF gilt stock down and paused active sales to the private sector, with £146bn of 8-22y gilts to be sold to the Government at £20bn/year and £120bn of long gilts retained to back banknote issuance.

Exhibit 1: Global Central Banks Have Mostly Either Held or Hiked Over the Last Three Months

Source: Goldman Sachs Global Investment Research