Our latest views on data, trends and events influencing the markets.

Capital Markets

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The Federated Hermes Inflation Dashboard is a snapshot of US inflation. The dashboard’s indicators work together to create a more comprehensive picture of inflation’s trajectory along with comparisons to previous time periods.

Inflation dashboard

ADDITIONAL RESOURCE

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A scenario-focused look at what’s moving markets.

third QUARTER 2025

Quarterly Update

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Featuring our latest forecasts and key capital markets trends.

October 2025

Monthly Update

view dashboard

The Federated Hermes Inflation Dashboard is a snapshot of US inflation. The dashboard’s indicators work together to create a more comprehensive picture of inflation’s trajectory along with comparisons to previous time periods.

Inflation dashboard

ADDITIONAL RESOURCE

DOWNLOAD PDF

A scenario-focused look at what’s moving markets.

third QUARTER 2025

Quarterly Update

DOWNLOAD PDF

Featuring our latest forecasts and key capital markets trends.

DECember 2025

Monthly Update

The new government of Sanae Takaichi doesn’t want rate hikes (what government ever does?) while the BOJ is keen to keep inflation low. In our view, Japanese borrowing costs are likely to continue higher next year. This could lead to a broad array of market effects, from further unwinding of the yen carry trade to weaker demand (and thus higher yields) for Treasurys if Japanese investors move some of their substantial holdings of US debt back home. Fed Chair Jerome Powell can likely sympathize with the economic and political perils that face his Japanese counterpart. In his latest press conference, Powell said that there is “no risk-free path for policy.” He was speaking of the Fed’s own circumstances at its December meeting, but the point seems broadly true. The Fed Chair seemed almost amused, though, when a questioner asked whether a rate hike could be in the offing for the US. Our outlook: There would be nuanced effects at the margins from a BoJ rate hike. These effects would tend to put a bit of pressure on US asset prices in the form of rising Treasury yields, which would result from falling bond prices. Also, an unwinding of the yen carry trade could come at some expense to US growth stocks. Absent a sudden event, however, these pressures are unlikely to prove disruptive. Our base case calls for continued moderate growth. For more on our scenario-led outlooks read our monthly and quarterly Capital Markets publications.

Source: Bloomberg, December 10, 2025

The Bank of Japan (BoJ) has long been the outlier among developed-market central banks. While the Federal Reserve, the Bank of England, and the European Central Bank have raised and lowered rates in recent years, the BoJ’s rate has been nearly as flat as the country’s Kanto Plain. In the past two years, however, there have been a few small hikes as the bank aims to squelch inflation, currently at 3%. It’s considered likely to hike again at its December 18-19 meeting, bringing the policy rate there from the current 0.50% to 0.75%.

DECEMber 15, 2025

Will rate hikes there impact asset prices here?

Japan zigs while others zag

Our latest views on data, trends and events influencing the markets.