Weekly Focus

Macro Research 18 September 2026

Weekly Focus Also the Fed turns hawkish Like the European Central Bank last week, the US Federal Reserve was in a Key global views tightening mood this week. A 25bp rate hike was not a surprise for markets, but it was surprising that the decision was taken by a unanimous monetary • Global macro backdrop remains policy committee, and that the member’s economic expectations (the so- resilient despite continued war in the called dot plot) showed near consensus for one more hike this year and a large Middle East minority expecting one more hike in 2027. Fed chairman Kevin Warsh repeated several times that current monetary policy is accommodative also • The AI boom fuels cost pressures and after the hike. Hence, we expect two further hikes before next summer, and global manufacturing demand short-term market interest rates increased further. However, long-term • We expect the ECB to hike rates in yields have if anything declined this week. The rate hike and the hawkish signal from the Fed underlines the central bank’s independence from politics. October and December, Fed to hike in US president Donald Trump has made it very clear that he thinks rates should December and March be cut, not raised, but the President’s attempts to create a Fed that would deliver that have mostly failed. In our view, the Fed’s move reflects the surprising strength of demand in the Key market movers US economy. Consumer spending that has continued to grow despite stagnating real wages, very large AI-related investments, and loose fiscal • Tuesday: euro area consumer policy continue to add to inflation pressures even though interest rates are confidence high enough to significantly dampen housing investment and the housing market more broadly. It is also related to the increase in energy prices which • Wednesday: flash September PMI for the Fed, like other central banks, worries can turn into more sustained most major economies inflation pressure. On this, there was a little relive during the week as oil prices • Thursday: Sweden, Norway, Switzerland declined following their spike last week. However, with a Brent oil price above rate decisions, German IFO business USD 100/bbl and very elevated prices of oil products, especially diesel, the concern very much persists. In Europe, gas prices also declined a little but climate remained high and remain key to watch for European interest rates. Not all central banks are surprising to the hawkish site, though. The Bank of Selected reading from Danske Bank Japan delivered the 25bp rate hike that was expected of it. However, there had been speculation of a 50bp “jumbo hike” and the two board members • Bank of England Review - Some less appointed by PM Takaichi voted against hiking at all, indicating that it is not a hawkish tunes, 17 September straight road towards higher rates from here. The Bank of England triggered a drop in market rates as it made no change to the Bank Rate and did not • Research US - Fed Review: First hike from sound like it had become more willing to hike, unlike the Fed and the ECB. At Fed and two more to come, 16 3.75%, we still see the policy rate as restrictive and the case for aggressive UK September hikes as weak. • Research Euro Area - A costly winter is Central bank excitement moves closer to our Nordic home next week, when coming, 16 September both the Norwegian and Swedish central banks make rate announcements where the result is not given in advance. That is especially so for Norway • China Flash - Exports and high-tech still where it is almost 50/50 if we get a rate hike or not, see also page 2. In terms main pillars of growth as consumption of economic data, we get preliminary PMIs for most major economies. That remains downbeat, 15 September will be especially interesting in the euro area, where surprisingly strong growth over the summer has made it easier for the ECB to tighten monetary policy, and it will be interesting to see if the momentum increases especially Chief Economist in manufacturing. Las Olsen

Important disclosures and certifications are contained from page 7 of this report.

• In Denmark, the September consumer confidence…