It is an important week for central bank interest rate decisions

This week, many major central banks are holding monetary policy meetings and investors must prepare for interest rate changes in both directions.

The focus is on the highly anticipated two-day Federal Reserve meeting, which begins on Tuesday.

The US Federal Reserve is widely expected to join other central banks around the world in beginning its own rate-cutting cycle. The only remaining question seems to be how much the Fed will cut rates.

Traders currently believe a quarter-percentage point cut is the most likely outcome, although according to CME's FedWatch tool, 41 percent expect a half-percentage point cut.

The next meeting of the Brazilian central bank will take place on Tuesday and Wednesday. The Bank of England, Norway's Norges Bank and the Reserve Bank of South Africa will follow on Thursday.

A busy week of central bank meetings will come to a close when the Bank of Japan announces its latest interest rate decision at the end of its two-day meeting on Friday.

“We are entering a phase of retrenchment,” John Bilton, global head of multi-asset strategy at JP Morgan Asset Management, told CNBC's “Squawk Box Europe” on Thursday.

Ahead of the European Central Bank's latest quarter-percentage-point rate cut, Bilton said the Fed would also cut interest rates by 25 basis points this week. The Bank of England would also “probably join in” after the British economy stagnated for the second month in a row in July.

“We have all the ingredients for the start of a longer cycle of austerity, but one that is probably not associated with a recession – and that is an unusual constellation,” said Bilton.

“This means that we have, in my opinion, a lot of volatility in terms of price discovery among those who believe that the Fed will actually [is] late, the ECB [is] It is now a recession and those like me who believe that we have no imbalances in the economy will even lead this to a further uptrend.”

Fed policymakers have laid the groundwork for interest rate cuts in recent weeks. The Fed's key interest rate is currently between 5.25 and 5.5 percent.

Some economists are arguing that the US Federal Reserve should cut the key interest rate by 50 basis points in September. They accuse the central bank of having gone “too far and too fast” in tightening its monetary policy in the past.

Others called such a move “very dangerous” for the markets and instead urged the Fed to cut interest rates by 25 basis points.

“We are more like 25, but [would] would like to see 50,” David Volpe, deputy chief investment officer at Emerald Asset Management, told CNBC's “Squawk Box Europe” on Friday.

“And the reason you're doing 50 next week is more or less a safety mechanism. You have seven weeks between next week and … the November meeting, and a lot of negative things can happen there,” Volpe said.

“So it would be more of a way to get ahead of things. The Fed has been a little bit on the fence, so we think it would be good if they got things going, did the 50 now and then made a decision in November and December. Maybe then they'll do the 25,” he added.

The Brazilian central bank has cut its key interest rate several times since July last year and expects stronger-than-expected economic data for the second quarter to lead to a rate hike in September.

“We expect Banco Central to raise the Selic rate by 25 basis points (to 10.75%) next week and bring it to 11.50% by the end of 2024,” Wilson Ferrarezi, an economist at TS Lombard, said in a research note published Wednesday.

“Further rate hikes through 2025 cannot be ruled out and will depend on the strength of domestic activity in the fourth quarter of 2024,” he added.

In the UK, a rate cut by the Bank of England on Thursday is considered unlikely. According to a Reuters poll published on Friday, all 65 economists surveyed expect the Bank of England to leave the base rate at 5%.

At the beginning of August, the Bank of England made its first interest rate cut in over four years.

“From now on, we have quarterly cuts. We don't think they're going to do anything next week, after a 7-2 result,” Ruben Segura Cayuela, head of European economics at Bank of America, told CNBC's “Squawk Box Europe” on Friday.

He added that the BOE's next rate cut would likely come in November.

The South African central bank is expected to cut interest rates on Thursday, the first move since the central bank's response to the coronavirus pandemic four years ago, according to a Reuters poll of economists.

Norges Bank is expected to hold its next meeting on Thursday. The Norwegian central bank left its key interest rate unchanged at a 16-year high of 4.5 percent in mid-August, saying at the time that the key rate “will likely remain at this level for some time to come.”

The Bank of Japan, meanwhile, is not expected to raise interest rates by the end of the week, although a majority of economists surveyed by Reuters expect an increase by the end of the year.