What will foreign central banks do about interest rates?

Bankers — the ones that manage national economies — get no rest this week. Central banks in a host of countries are meeting soon, starting with Sweden’s Riksbank and the Bank of Japan, followed by the U.S. Federal Reserve, Switzerland’s National Bank and the Bank of England later in the week.

Keep in mind, these central banks can have a big effect on their respective economies. They set key interest rates, generally with two mandates in mind: to control inflation, which generally means higher rates, and to support strong employment and economic growth, which generally means lower rates.

Right now, the economic winds blowing on these central banks are swirling in a lot of different directions.

It’s not an easy time to be a central banker, trying to figure out whether your national economy is in for strong steady growth or about to crater, said Jennifer Lee, senior economist and managing director at BMO Capital Markets in Toronto.

There’s geopolitical risk from the Middle East and trade risk from the U.S.

“The uncertainty over tariffs — whether or not they’re going to happen, be at these levels, whether or not they’re even legal, for goodness sakes,” Lee said.

Central banks also have specific economic issues to deal with. In Japan, the economy’s been improving after decades of stagnation. 

“Wages starting to pick up, and consumers starting to spend a little bit. Unfortunately, inflation remains stubbornly above target. They’re uncertain about how much all the tariffs are going to hurt exports. At some point they’re going to have to start raising rates,” Lee said.

Most other global banks — Switzerland, Sweden, England — are likely to cut rates soon. 

“There are many countries where inflation does seem to be coming under control, while economic growth looks pretty bleak,” said Cornell University economist Eswar Prasad.

But he said there’s also hesitancy: “As some of the Hindu scriptures say: ‘Inaction is a very important type of action.’ The default option for central bankers, which is to do nothing, can be a prudent approach given all the uncertainty.”

“Nothing” — no change in interest rates — is what’s expected from the U.S. Fed this week, said Brian Rehling, head of global fixed-income strategy at the Wells Fargo Investment Institute. 

“The economy is doing OK, employment markets look OK. So not really a reason to make an imminent change,” he said.

He predicts the Fed will hold tight until it becomes clearer how President Trump’s tariffs and tax cuts impact inflation and growth.