Central bankers in the world's big, rich economies have played a frustrating guessing game with financial markets this year. But if there is one thing about which investors can be more or less sure, it is that for the first time in years, official interest rates in America, Europe and Japan are heading in the same direction. The European Central Bank has dropped a heavy hint that, having lifted rates in December, March and June, it will do so again on August 3rd. Its governing council will meet in person that day rather than by telephone, its August custom. Policymakers at America's Federal Reserve may wish that they could give the markets a summer break, having raised the federal funds rate to 5.25% on June 29th, the 17th increase in as many meetings. The markets, however, are not expecting a rest. Non-farm payrolls grew less in the second quarter than in the first, but hourly earnings rose in June at their fastest year-on-year pace since 2001. Enough inflation apparently lurks in the American economy for traders to expect another quarter-point rise when the Fed's rate-setters meet on August 8th. And as The Economist went to press, the Bank of Japan (BOJ) seemed likely to complete the pattern by raising interest rates above zero on July 14th for the first time since 2000, probably to 0.25%.
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