Fed and ECB in lockstep
While the ECB and the Fed are unlikely to respond to the high inflation risks with interest rate hikes as early as next week,...
Commerzbank Economic Research
10/23/2026
The “job” isn't done yet
Next week, both the ECB and the Fed will hold their interest rate meetings. At these meetings, both central banks will have to acknowledge that inflationary risks on both sides of the Atlantic have not yet been averted and that one or more additional interest rate hikes are necessary. For example, the Federal Reserve’s preferred measure of inflation, the deflator of personal consumption expenditures (PCE), was 3.4% higher in August than a year earlier. The core rate, which excludes the often-volatile energy and food prices, stood at 3.0%. This means the inflation rate has been above the Fed’s 2% target for more than five and a half years, and this year the gap to that target has actually widened somewhat.
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