The Federal Reserve and the Bank of Japan are facing tough decisions on whether to raise interest rates as early as September amid mounting inflation risks. Fed Governor Waller, in a speech on July 13, pointed to broadening price increases and mentioned the possibility of an early rate hike. However, the June consumer price index released on July 14 showed a slowdown to 2.6 percent year-on-year, and the probability of a July rate hike priced into interest rate futures fell to 12.3 percent. Meanwhile, Japan's June domestic corporate goods price index came in stronger at 7.1 percent year-on-year, and with import prices remaining elevated, inflationary pressures are intensifying. The interest rate swap market sees about a 70 percent chance of a rate hike by October, but depending on price and exchange rate developments, a September hike is also on the table.