Markets are already fully priced for a rise of 75 basis points from the Federal Reserve, with futures showing an 18 per cent chance of a full percentage point.
"Our answer is high enough to generate a tightening in financial conditions that imposes a drag on activity sufficient to maintain a solidly below-potential growth trajectory." That risk saw two-year Treasury yields surge 30 basis points last week alone to reach the highest since 2007 at 3.92 per cent, so making stocks look more expensive in comparison and dragging the S&P 500 down almost 5 per cent for the week.
Japan's Nikkei was shut, but futures implied an index of 27,335 compared to Friday's close of 27,567.BofA's latest fund manager survey suggests allocations to global stocks are at an all-time low. Most of the banks meeting this week - from Switzerland to South Africa - are expected to hike, with markets split on whether the Bank of England will go by 50 or 75 basis points.
The dollar was steady at 142.78 yen on Monday, having backed away from the recent 24-year peak of 144.99 in the face of increasingly strident intervention warnings from Japanese policymakers.