Major central banks on hold for now

US equities moved higher for the week as investors shrugged off inflation fears to focus on strong corporate earnings. The Federal Reserve met on Wednesday and left rates unchanged as expected, with the committee noting that “inflation is elevated, in part reflecting the recent increase in global energy prices”. US Q1 GDP data showed that the economy expanded by 2.0% in Q1, slightly less than forecast.

Over in Europe, the European Central Bank kept rates steady but noted that they had discussed a rate hike in detail. Markets are expecting the first hike to come at the June meeting. The Bank of England also held rates steady but warned that higher inflation is “unavoidable” due to war in the Middle East. The Bank of Japan left rates unchanged, but three board members proposed hiking rates, indicating concerns over inflationary pressures.

Last week's highlights

	Federal Reserve Meeting (29/04) – Rates unchanged, as policymakers balance the threats of persistent inflation and a softening labour market. Core PCE Price Index – March (30/04) – Came in at 3.2% as expected.  US Q1 GDP (30/04) – Came in at 2.0%, lower than expected.
	European Central Bank Meeting (30/04) – Held rates steady ,markets expecting a hike at June meeting.  Preliminary Eurozone CPI – April (30/04) – Higher than expected at 3.0% vs 2.9% forecast.
	Bank of England Meeting (30/04) – Left rates unchanged but warned that higher inflation is “unavoidable” due to war in the Middle East.
	Bank of Canada Meeting (29/04) – Left rates unchanged as expected.  Bank of Japan Meeting (28/04) - Kept rates steady but three board members proposed hiking rates, indicating concerns over inflationary pressures from the Middle East conflict.

This week, US investors will be focused on labour market data with nonfarm payrolls and ADP’s nonfarm employment data due out. Elsewhere, the HCOB Eurozone PMIs will be released. In the UK, investors will receive S&P Global’s Composite PMI and the Halifax House Price Index. Finally, the Reserve Bank of Australia will meet on Tuesday with markets expecting an interest rate hike. 

What's on the radar

	S&P Global Services PMI (05/05) ADP Nonfarm Employment Change (06/05) Nonfarm Payrolls (08/05)
	HCOB Eurozone PMIs – (04/05 & 06/05)
	S&P Global Composite PMI (05/05) Halifax House Price Index (08/05)
	Reserve Bank of Australia Meeting (05/05) Brazil CPI (08/05)

Chart of the moment - Kicking the can down the road 

Source: Federal Reserve Economic Data as of 31/03/2026. Charts shows US Federal Debt Held by the Public as Percent of Gross Domestic Product, Quarterly, Seasonally Adjusted. *Note: GDP stands for gross domestic product.

• US national debt has risen above 100% of *GDP and is approaching the post World War II record of 106%. Large, persistent deficits near 6% of GDP are expected to drive the ratio higher.
• As of 31st March, US publicly held debt was $31.265 trillion, while GDP over the preceding year was $31.216 trillion, according to data released last week.
• The Congressional Budget Office has warned that, under current trajectories, debt held by the public will rise to 108% of GDP by 2030, surpassing the postwar record.