OECD sees global inflation lingering, more Fed hikes through 2027

September 23, 2026 at 02:27 PM2 min

This digest was compiled by AI from multiple sources — links to the originals are below.

The OECD raised its 2027 inflation projections for every G-20 economy except China and Saudi Arabia, citing energy shocks and demand pressures. The Paris-based organization said central banks must remain vigilant and may need to tighten further. The outlook follows rate hikes this month by the Federal Reserve, European Central Bank and Bank of Japan.

Key Facts

The OECD raised 2027 consumer-price growth projections for every G-20 economy except China and Saudi Arabia.
The OECD predicts one more Federal Reserve rate hike this year and further modest increases in the euro area, Australia and South Korea.
The Bank of England and Bank of Canada are expected to keep rates steady for now, according to the OECD.
Global growth forecasts are roughly unchanged from June, with downgrades for Canada and France.

Inflation Outlook

The OECD raised its 2027 inflation projections for all G-20 economies except China and Saudi Arabia compared with its June report. The organization cited renewed energy price shocks and stronger-than-expected demand pressures as key drivers. OECD Chief Economist Stefano Scarpetta said central banks must remain very vigilant and may need to intervene more than they did in 2022.

Monetary Policy Response

The OECD expects one more Federal Reserve rate hike this year, along with further modest increases in the euro area, Australia and South Korea. The Bank of Japan is projected to implement additional policy rate increases, while the Bank of England and Bank of Canada are seen holding rates steady. Money markets are almost evenly split on whether the Fed, ECB and BOE will deliver one or two more hikes by year-end. Traders are more certain the BOJ will move just once more and favor a quarter-point hike by the Bank of Canada in that period.

Growth Forecasts

The OECD left its global growth path roughly unchanged from June, with only modest adjustments. Canada's outlook was downgraded due to its trade war with the US, and France's outlook was cut amid looming political instability.