The Federal Reserve keeps the benchmark interest rate unchanged, implying that the earliest possible rate cut may be in September
PANews reported on August 1 that the Federal Reserve concluded its two-day monetary policy meeting on July 31, announcing that it will keep the federal funds rate target range unchanged at between 5.25% and 5.5%. This is the eighth consecutive meeting since last September where the Fed has maintained steady rates, in line with market expectations. The Federal Open Market Committee, the decision-making body of the Fed, stated in a declaration after the meeting that inflation has eased over the past year but remains relatively high. In recent months, "more progress" has been made towards achieving a 2% inflation target. However, in June's statement, they described making "moderate progress" against inflation.
Federal Reserve Chairman Jerome Powell said at a press conference after the meeting that as labor markets cool down, risks of unexpected inflation have decreased and downside risks to labor markets are now real. He noted that while no decisions about future actions have been made by Fed officials yet if data shows continued easing of inflation interest rate cuts could land as early as September. Powell said: “We are getting closer to an appropriate time for a rate cut but we're not quite there yet. If criteria are met we may discuss lowering policy rates at our next meeting in September."
The Chicago Mercantile Exchange's Fed Watch tool shows a probability of 90.5% for cutting interest rates by 25 basis points in September and a probability of 9.5% for cutting them by 50 basis points Furthermore; The Fed might also further reduce interest rates during meetings held in November and December each cut being by another set of twenty-five basis points.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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