The US Federal Reserve is widely anticipated to maintain its current interest rates ranging from 5.25% to 5.5%, during the September 19-20 meeting. This decision comes as August’s core inflation figures closely aligned with expectations, and the economy shows signs of resilience.
According to the CME FedWatch tool, bankers and traders assign a 99% probability to the Fed refraining from a rate hike this month. Additionally, they see nearly a 70% likelihood that rates will remain unchanged in November, as reported by CME’s data.
In its persistent effort to combat inflation, the Fed has consecutively raised rates 11 times over the course of 17 months, leading to the current rate level. The outcome of the two-day Federal Open Market Committee (FOMC) meeting is scheduled to be revealed on Wednesday.
BofA Securities analysts expect the Fed to maintain the federal funds rate target range at 5.25% to 5.5% during the September FOMC meeting, consistent with recent Fed communications and current market expectations.
Capital Economics also foresees the Fed maintaining rates for now but anticipates a rate cut in early 2024. Economist Andrew Hunter stated that a swift decline in inflation would likely prompt officials to cut rates more aggressively than what markets are currently pricing in.
Nonetheless, some analysts suggest that the US central bank might opt for one more rate hike before the year’s end.
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