ECB Forum Preview: World's main central bankers expected to shed light on interest rates as uncertainty grows

• Central bank bosses to discuss monetary policy collectively in the ECB forum.
• Divergence in recent monetary policy between the Fed, ECB, BoE and BoJ makes the event particularly interesting.
• Jerome Powell's comment will be particularly scrutinized ahead of the July policy meeting.

Jerome Powell, Chairman of the Federal Reserve System (Fed), and Christine Lagarde, European Central Bank (ECB) President, will speak at the 2025 ECB Forum on Central Banking at 13:30 GMT on Tuesday, July 1.

Alongside Fed Chairman Powell and ECB President Lagarde, Bank of England (BoE) Governor Andrew Bailey and Bank of Japan (BoJ) Governor Kazuo Ueda will also be taking part in the same panel.

The Fed left its policy rate unchanged in the range of 4.25%-4.5% following the June policy meeting, and the revised Summary of Economic Projections (the so-called dot-plot) showed that policymakers were still projecting the Fed to cut the policy rate twice this year. While testifying about the Semiannual Monetary Policy Report before the US Congress, Powell explained that the reason they adopt a cautious approach to policy-easing is that forecasts in and out of the Fed expect a meaningful increase in inflation this year due to tariffs.

The ECB lowered its key rates by 25 basis points (bps) in June, and ECB President Lagarde hinted that they might be at the end of the easing cycle. Meanwhile, the BoE maintained its policy rate at 4.25% after the June meeting, but three members of the Monetary Policy Committee (MPC) voted in favor of a 25 bps rate cut, citing material further loosening in the labour market, subdued consumer demand and pay deals near sustainable rates. Finally, BoJ Governor Kazuo Ueda reiterated that they will continue to raise rates if the economy and prices move in line with their forecasts after leaving the short-term interest rate target unchanged in the range of 0.4%- 0.5% in June.

About Jerome Powell (via Federalreserve.gov)

"Jerome H. Powell first took office as Chair of the Board of Governors of the Federal Reserve System on February 5, 2018, for a four-year term. He was reappointed to the office and sworn in for a second four-year term on May 23, 2022. Mr. Powell also serves as Chairman of the Federal Open Market Committee, the System's principal monetary policymaking body. Mr. Powell has served as a member of the Board of Governors since taking office on May 25, 2012, to fill an unexpired term. He was reappointed to the Board and sworn in on June 16, 2014, for a term ending January 31, 2028."