A plain-language look at last week's key market events. What happened, why it mattered — no predictions, no noise. Updated every weekend.
Wednesday's Federal Reserve decision was the single biggest event of the week, and possibly of the past several months. The Fed raised its benchmark rate by 25 basis points to a target range of 3.75%–4.00% — its first increase since July 2023, ending a cycle that had run from cuts through a long stretch of holds.
The statement itself was brief: economic activity is "expanding at a solid pace" and inflation "remains elevated," language that gives the Fed room to keep hiking without over-committing to a specific pace. For bias purposes, this is the clearest, most direct signal yet that the Fed's multi-month hawkish drift — building since Warsh's Jackson Hole speech and the earlier FOMC minutes — has now become policy. The next meeting, and whatever data lands before it, matters more than usual.
Two days after the Fed, Friday's Bank of Japan decision added a second major central bank hike to the week. The BOJ raised its policy rate by 25 basis points to 1.25%, the highest level since 1995, continuing a tightening cycle that began in 2024.
The hike itself was almost universally expected — 89% of economists surveyed by CNBC called it correctly. What moved the yen was the vote itself: the board split 7–2, with two members preferring to hold rates steady. A hike that isn't unanimous casts doubt on how confidently the BOJ will keep tightening, and that uncertainty was enough to send the yen weaker rather than stronger, the opposite of the textbook reaction to a rate hike.
For bias purposes: Japan and the US both hiked in the same week for the first time in years, yet the yen fell rather than strengthened — a reminder that the vote composition and forward tone of a decision can matter more to price action than the headline rate move itself.
Wednesday's UK CPI report showed inflation accelerating again: annual CPI rose to 3.1% from 2.9%, in line with forecasts but continuing the upward drift that began two recaps ago. Thursday's Bank of England decision held rates unchanged at 3.75% regardless, with the vote split unchanged at 6–3 for the third straight meeting — the same three members voting for a hike, the same six preferring to hold.
Tuesday's labour market data added a genuine surprise: the claimant count jumped 27,800 against a forecast rise of just 8,300, and July's figure — previously reported as a sharp fall — was revised to a smaller decline. Wage growth (3m/y) held at 3.9%, in line with forecast but down from 4.2% previously. A weaker labour market alongside accelerating inflation is an uncomfortable combination for the Bank, and likely explains why the vote split hasn't budged despite three straight months of hotter-than-expected prices — the hawks have a stronger case, but a softening jobs market gives the majority reason to stay cautious. Friday's retail sales offered one bright spot, beating forecasts at 0.5% against an expected 0.2% decline.
Wednesday's US retail sales report, released the same day as the Fed decision, was a genuine blowout: headline sales rose 1.2% against 0.8% expected, and core sales (excluding autos and gas) rose 1.4% against 0.6% expected — more than double the forecast on both measures. Combined with Thursday's Philly Fed reading of 37.8 (beating the 31.3 forecast, though down from the prior month's 47.4) and jobless claims falling to a five-week low of 196K, the US data this week leaned firmly toward "resilient economy," giving the Fed's hawkish pivot a supportive backdrop rather than a contradictory one.
Canada's inflation data on Monday moved the other way: headline CPI fell 0.1% on the month, in line with forecast, while the Bank of Canada's core measures (median and trimmed) held steady and the common CPI measure eased slightly to 2.6%. A calmer print after last month's uptick, giving the BoC less reason to shift from its current hold. New Zealand's Q2 GDP grew 0.2%, ahead of the 0.1% forecast but a clear slowdown from the previous quarter's 0.9% — worth watching alongside the RBNZ's recent hawkish-leaning hold.
This recap summarises publicly reported economic data and central bank communications for the stated week. It is general information, not financial advice, and looks backwards only — it makes no predictions. Combine it with your own bias work (COT positioning, central bank direction, seasonal tendency) before drawing any conclusions.