The world’s three most powerful central banks convene this week. Three meetings within 36 hours of each other are set to conclude with the Fed raising interest rates, the European Central Bank potentially fleshing out its plan to cease buying bonds, and the Bank of Japan maintaining its massive stimulus program.

ECB Meeting on Thursday

European Central Bank policy makers anticipate holding a pivotal discussion at their meeting this week that could conclude with a public announcement on when they intend to cease asset purchases.

President Mario Draghi’s Governing Council is likely to treat the meeting in Latvia as an opportunity to debate winding down bond-buying. Purchases are currently intended to run until at least September.

Fed Meeting (2-day meeting starts Tuesday)

The Federal Reserve’s rate setting committee ends a two-day meeting on Wednesday. Economists expect the central bank will raise interest rates for a second time this year. Fed Chair Jerome Powell said last month that moves by the Fed and other major central banks to increase rates shouldn’t disrupt the global economy.

Bank of Japan Meeting (2-day meeting starts Thursday)

Tightening isn’t on the agenda yet for the BOJ, which turned to asset-purchases years before the Fed and ECB to address entrenched deflationary forces in Japan. Even with the addition of yield-curve control, the BOJ is still buying vast quantities of Japanese government bonds.

Since the last BOJ meeting in April, disappointing data has made it clear that Japan is a long way off from its 2 percent inflation target. The core consumer price index slipped to 0.7 percent, wage growth fell back to trend and gross domestic product ended the longest expansionary streak in almost three decades.

Conclusion

While the U.S. central bank is in the lead, the ECB’s pending pivot after more than three years of quantitative easing reflects mounting optimism that the world economy remains on track for a solid expansion in 2018 after a wobble in the first quarter shook investors.

Such confidence comes despite trade war threats by US President Donald Trump, the rise of a populist government in Italy, the costliest oil in more than three years and palpitations in emerging markets from Turkey to Argentina, factors, which all pose a challenge to growth.

We continue to expect 2018 to end the year with positive gains for global equities with particular preference to European and Emerging Market equities.

However, it is also true that pullbacks and volatility will become more common as investors adjust to rising interest rates. More volatility should not detail the underlying economic expansion or fundamentally dent risk assets, but it will make markets more bumpy and less predictable.