The Federal Reserve is expected to hold its benchmark lending rate steady this week as it waits for more data to understand how previous rate hikes are affecting the US economy. The central bank raised rates to a 22-year high in July.
At the conclusion of its two-day policy meeting on Wednesday, the Fed is also set to release a fresh set of economic projections that will likely reflect stronger economic growth and slightly lower unemployment this year, compared with previous estimates. Officials’ new economic projections will likely show at least one more rate hike this year. There seems to be a consensus among Fed officials that holding rates steady this month is the right move — but some have said the Fed could raise rates again after September.
Investors will be looking for clues that the Fed is done hiking rates, but Fed Chair Jerome Powell will likely stress in his post-meeting news conference that inflation remains unacceptably high. That would leave the door open for another rate increase, which could come when the following meeting concludes, on November 1. Financial markets currently see a 69% chance the Fed will continue to pause rate increases in November, according to the CME FedWatch Tool.
