[DigitalToday Jinju Hong (홍진주)] As the likelihood grows that the U.S. Federal Reserve (Fed) could move to raise interest rates again later this year, major central banks around the world are showing a similar pattern and stepping up a rate-hike stance again.

According to blockchain outlet Cryptopolitan on Oct. 12 local time, 15 of 33 major central banks raised policy rates over the past six months. That is 45%. It is the highest level since 2023 and close to the 55% recorded in 2011 and 2018. In 2022, when inflation surged after the COVID-19 pandemic due to large-scale stimulus measures, nearly 95% of central banks moved to tighten policy. In 2026 as well, 54 central banks raised rates. In particular, over the past three months, rate increases outnumbered cuts for the first time since September 2023.

Within the Fed, the view has persisted that inflation is still not within a controllable range. Beth Hammack (베스 해맥), president of the Federal Reserve Bank of Cleveland, said at the National Association for Business Economics annual meeting on Oct. 12 that policymakers should move pre-emptively before inflation becomes a bigger problem. "If possible, it is better to make small adjustments relatively quickly than to wait until a larger correction is needed," she said.

Hammack is a voting member at the Federal Open Market Committee (FOMC) meetings remaining this year. She also said a restrictive monetary policy stance is appropriate to return to the 2% inflation target in a timely manner. She also pointed out that price pressures have spread across the economy, not just some items, making it harder for the Fed to achieve its goal.

The Fed has already raised its policy rate in September. It was the first increase in three years. Kevin Warsh (케빈 워시), the Fed chair, said at the time the decision would support a "more timely return" to the inflation goal. "Inflation is too high, and it has stayed that way for too long," he said.

The problem is that economic indicators are sending mixed signals. The personal consumption expenditures (PCE) price index in August rose 3.4% from a year earlier, while core inflation excluding food and energy was 3%. Another assessment said both the headline and core measures in August were 3%, the same as in July, and came in below market forecasts. Inflation data alone point to a slowdown, but not enough for the Fed to feel assured.

In contrast, U.S. second-quarter gross domestic product (GDP) growth was revised up to 2.2% from 1.5%. That means the economy was more resilient than expected. But employment weakened. September nonfarm employment rose by only 29,000, the lowest level in 2026. For the Fed, further rate hikes to tame inflation could weigh on the labour market.

Markets also reflect this dilemma. Markets currently see a high likelihood of no rate hike at the October meeting. CME FedWatch put the probability of a hold above 78%, and another estimate put it as high as 81%. That is higher than about 54% a month earlier. Still, it is pricing in more than an 88% chance of an additional hike in December.

Borrowers and companies are also facing the possibility that high funding costs will last longer. Other central banks are also stepping back from rate cuts and leaning again toward tightening, drawing market attention to the possibility that global financial conditions could tighten further by year-end.