Will the world's central banks raise interest rates this week?

Welcome to “Central Bank Week.” A whole bunch of the majors and near-majors are meeting to set interest rates: the U.S. Federal Reserve on Tuesday and Wednesday, the Bank of Canada also on Wednesday, European Central Bank on Thursday and Bank of Japan on Friday.

The Fed hiked rates at its last meeting, in September, raising its benchmark short-term federal funds rate to a range of 3.75% to 4%.

Since then, inflation readings in the form of the consumer price index and personal consumption expenditures index have been stubbornly high and moving — if at all — farther away from the Fed’s 2% target. And with Middle East tensions still high, oil prices have risen, putting further upward pressure on prices.

These are the pressures weighing on all the major central banks, but that doesn’t mean they’re all going to raise rates right away to fight that inflation. Each major economy also has its own needs and challenges.

Let’s start with the Bank of Canada, which Jennifer Lee, a senior economist at BMO Capital Markets in Toronto, said is in a tight spot.

“This trade war has really hammered business confidence and consumer confidence,” Lee said. “Three quarters of our exports go to the U.S.”

The Bank of Canada is expected to hike rates this week, which could make the downturn from the trade war worse. But there’s also inflation.

“You know, I feel it when I’m standing at the pump and waiting for my tank to be filled up and I’m watching the dollars go higher and higher and higher — it hurts,” Lee said. “Given that we’re not immune to inflation and higher energy prices, it is sort of understandable why they would want to raise rates.”

In the European Union, inflation is high as oil and gas supplies remain disrupted, but the EU is also facing domestic unrest in its second-biggest economy, according to Richard de Chazal, a macro analyst at investment firm William Blair in Madrid.

“What’s now happening in France has put the kibosh on any chance of a rate increase,” de Chazal said. “I think a rate increase at this point would just be exacerbating the situation.”

Politics is also helping to diminish the chances of a rate hike from the U.S. Federal Reserve this week — though not because a rate-hike isn’t warranted, according to former Fed governor Frederic Mishkin.

“The inflation rate is too high and not coming down,” Mishkin said. “Also, it’s been above the target range for close to five years.”

But Mishkin said that President Donald Trump’s unprecedented attacks on Fed independence since his reelection have the Fed governors playing it safe before the midterms.

“If the Fed raised rates at this particular juncture, Trump would make claims that the Fed is being very political,” Mishkin said. “So, I think it’s understandable — the Fed doesn’t want to poke the bear.”

Still, Mishkin expects the Fed to return to rate-hiking — twice by early 2027.