Investors are closely examining the minutes of the Federal Reserve’s July meeting, scheduled for release Wednesday, for clues about the central bank’s future policy direction. At that meeting, the Fed held its benchmark interest rate steady at 3.5-3.75 percent for the fifth consecutive time amid ongoing inflation concerns fueled in part by elevated energy prices linked to the conflict in Iran.

With inflation still above the Fed’s 2 percent target, market participants hope the minutes will shed light on internal deliberations and the potential for further rate increases. The absence of explicit forward guidance from newly appointed Fed Chair Kevin Warsh, who has refrained from detailed commentary on recent decisions, has heightened anticipation for insights into the policymaking process.

Rooja Kumra, a rates strategist at TD Securities, noted that the minutes could reveal the degree of disagreement within the Federal Open Market Committee (FOMC), referencing Warsh’s openness to robust debate among committee members. Meanwhile, Van Luu, global head of solutions strategy at Russell Investments, is particularly interested in assessing the size of the hawkish faction following three members’ July dissenting votes in favor of a rate hike.

Market indicators show traders assign about a 30 percent chance of a quarter-point Fed rate increase in September. Investors will be especially attentive to any indication of the Fed’s “reaction function”—how it might adjust policy based on incoming economic data—and which inflation metrics it prioritizes, factors that could influence expectations around future tightening.

Meanwhile, in Japan, inflation data expected Friday may influence the Bank of Japan’s monetary stance. The core consumer price index excluding food is forecast to rise at an annual rate of 1.8 percent in July, up from 1.6 percent in June. This rise, driven by increased energy costs and a weakening yen pushing up prices on items such as housing and furniture, may add pressure on the BoJ to revise its policy.

Japan’s provisional GDP data for the second quarter, anticipated to show 0.5 percent growth consistent with the previous quarter, also signals steady economic activity, bolstering arguments for potential rate increases. Economist Stefan Angrick of Moody’s Analytics highlighted that ongoing yen weakness could be pivotal in the BoJ’s decision-making. Tokyo University’s Takeo Hoshi remarked that current inflation trends are likely to reinforce market expectations for a rate hike at the upcoming meeting.

In the United Kingdom, official inflation data due Wednesday are expected to show a rise in consumer price inflation to 2.9 percent year-on-year in July, after a recent dip to a 15-month low in June. Rising energy costs amid continued Middle East tensions are seen as key drivers behind the anticipated uptick.

The Bank of England has projected inflation could reach 3.2 percent by year-end as higher energy prices continue to filter through the economy. Services inflation, a closely monitored gauge of underlying price pressures, is expected to moderate slightly in July but economists predict a rebound in September, aligned with the end of the government’s summer VAT relief on attractions and children’s meals.

Traders currently price in just a one-in-four chance of a rate increase at the Bank of England’s September meeting, with a single quarter-point increase likely by year-end. Elevated oil prices, currently around $87 per barrel for Brent crude, pose a potential risk to the central bank’s inflation outlook and could influence future policy moves.