Artificial intelligence policy, three major central bank decisions and developments surrounding the Strait of Hormuz are among the main issues for markets this week.
Comments from Anthropic CEO Dario Amodei about slowing the development of advanced AI models have drawn attention to the potential implications for technology investment. Meanwhile, the Federal Reserve and Bank of Japan are expected to raise interest rates, while the Bank of England is expected to leave policy unchanged.
Oil markets are also monitoring Middle East developments after a planned meeting between Gulf states and Iran concerning the Strait of Hormuz was postponed and Brent crude briefly moved above $108 a barrel.
1. AI Safety Debate Draws Market Attention
Anthropic CEO Dario Amodei called on artificial intelligence companies to slow the development of advanced models in an essay published on Saturday, citing risks that increasingly capable systems could be misused.
“Progress will still seem fast, and we must make wise use of the time we gain,” Amodei wrote.
The comments followed Anthropic’s disclosure that several actors had used its Claude AI models in activities ranging from weapons development to fraud.
Markets also assessed support for concerns surrounding the pace of AI development from OpenAI CEO Sam Altman and xAI chief Elon Musk, particularly for the potential implications for capital spending on AI infrastructure.
Deutsche Bank analysts said the debate could affect the “composition of AI capex rather than its scale,” with companies potentially redirecting a greater proportion of investment towards safety, monitoring and governance.
Altman also said OpenAI would not proceed with a potential public offering this year because of safety concerns.
AI-linked stocks declined in Asian trading, including SoftBank in Japan and Taiwan Semiconductor Manufacturing Company (NYSE:TSM). SK Hynix (NASDAQ:SKHY) and Samsung Electronics (USOTC:SSNHZ) also fell in South Korea, while European equities came under pressure.
2. Federal Reserve Rate Decision
The Federal Reserve is due to conclude its two-day policy meeting on Wednesday, with markets expecting an increase in interest rates.
US data released last week showed stronger-than-expected underlying consumer price growth in August, contributing to expectations for tighter monetary policy.
Fed Chair Kevin Warsh has not provided a detailed path for future interest rates. In a recent speech, he said the central bank must be confident that underlying inflation is moving to “our objective, clearly and at sufficient speed.”
President Donald Trump, who appointed Warsh as Fed Chair earlier this year, has continued to oppose higher interest rates and has threatened to restrict a large portion of US trade if the Fed raises rates.
3. Bank of Japan Expected to Raise Rates
The Bank of Japan is expected to raise its policy rate to 1.25% at its September 18 meeting.
A Reuters poll also indicated that the BOJ could increase rates by another 25 basis points to 1.75% during the second quarter of next year, earlier than previously expected by many observers.
Most respondents said a reported joint US-Japan intervention involving purchases of the yen, following the currency’s decline to a four-decade low, had added to the case for higher Japanese interest rates.
US Treasury Secretary Scott Bessent told BOJ Governor Kazuo Ueda this month that he would support “decisive” action by the central bank to prevent further yen weakness and stabilise the currency.
4. Bank of England Expected to Hold at 3.75%
The Bank of England is expected to leave its Bank Rate at 3.75%, according to a Reuters poll, with economists forecasting that the rate will remain at that level for the rest of this year and at least until the middle of 2027.
Economists surveyed said UK inflation had not been sufficient to support an increase in borrowing costs.
At the same time, elevated energy prices linked to the Middle East conflict have reduced expectations for near-term monetary easing, with respondents not expecting a potential rate cut to be considered until late 2027.
Deutsche Bank analysts said they expect the Monetary Policy Committee to remain “relatively cautious compared with some other major central banks.”
The European Central Bank raised rates for the second time this year last week and increased its inflation forecasts, citing higher energy prices associated with the Iran conflict.
5. Strait of Hormuz Talks Postponed
A planned meeting between Gulf states and Iran concerning the Strait of Hormuz has been postponed.
Oman’s foreign minister, who has been involved in efforts to reach an agreement with Tehran concerning the waterway, said the meeting had been delayed “in the interests of consensus.”
Iran’s foreign ministry said it would coordinate with Oman to arrange another date, according to Fars news agency.
Iranian officials had previously said an agreement with Oman on reopening the Strait of Hormuz would be presented to Gulf Arab states. Before the latest Middle East fighting began in late February, approximately one-fifth of global oil and liquefied natural gas flows passed through the waterway.
Separately, attacks on Saudi Arabia by Iran-backed Houthi militants in Yemen led to the closure of a major oil pipeline, while attacks on vessels in the Gulf added to disruption affecting regional energy shipments.
Brent crude futures rose following the developments and briefly traded above $108 a barrel.