Central Banks and Money
85hot
Median position across economies | Data for Sep 2026
Hot and cold describe position, not good or bad: warm does not mean a fall is coming, and an extreme reading does not mean a quick reversal. We describe history only, with no buy or sell advice.
What it is
Policy rates of the central banks of the US, the euro area, Japan, the UK, China, South Korea, India, Brazil and Taiwan. The headline reading is the median of their positions.
When central banks tighten or ease together, it says more about global money conditions than the Fed alone does.
Where a country changed its policy instrument, the BIS links the series using the instrument in use at the time.
Where it stands now
coldcoolneutralwarmhotHatched = earlier periods that were also hot
Short sample: positions start only in 2007 (less than 30 years), so conclusions should be more cautious.
| Economies | Percentile | Level | Data month |
|---|---|---|---|
| Brazil | 91 | hotat an extreme | Sep 2026 |
| Taiwan (discount rate) | 89 | hot | Aug 2026 |
| South Korea | 86 | hot | Sep 2026 |
| Euro area | 85 | hot | Sep 2026 |
| Japan | 85 | hot | Sep 2026 |
| US | 74 | warm | Sep 2026 |
| UK | 73 | warm | Sep 2026 |
| China | 55 | neutral | Sep 2026 |
| India | 26 | cool | Jun 2026 |
When it was here before
US stocks after it began, cumulative1 yr2 yr3 yr
For each period, the changes 1, 2 and 3 years after it began are cumulative and measured from its first month; “What happened next” is measured from every hot month, so the two give different numbers. The events named beside each period are major events of that time, not necessarily related to the readings here.
What happened nextSample too small to draw conclusions (past hot months: 9; market episodes: 2).
Has hot or cold lined up with later returns?
2007–2021: average yearly change in US stocks over the next 5 years
In this period, the hotter the month, the lower the average over the next 5 years. The months overlap, so there are really only a few market episodes. This is a tendency, not a rule, and not a forecast.
What it is linked to
US inflationtoPolicy ratesCommon explanation: Cause · same direction
When a country’s inflation is above target, its central bank raises rates
This issue: US inflation at 64 (warm), Policy rates at 85 (hot) — both above normal, in line with the common explanation.
Supported by the dataAgreement +0.54 · in step in 14 of 14 5-year periods
Policy ratestoGerman 10-yr yieldCommon explanation: Cause · same direction
Policy rates set the short end and pull long-term rates along (ECB → German bonds)
This issue: Policy rates at 85 (hot), German 10-yr yield at 100 (hot) — both above normal, in line with the common explanation.
Weak or inconsistentAgreement +0.40 · in step in 6 of 12 5-year periods
Data and sources