The Federal Reserve is widely expected to hold U.S. interest rates steady at its September meeting which concludes on Wednesday. Still, observers are being careful to not rule out the possibility of the Fed implementing further interest rate hikes later on in the year.
“I think the market is correct in expecting the Fed to skip this meeting” and “maintain its vigilance,” Marvin Loh, State Street senior global macro strategist commented. Still, Loh added that he expects the central bank to contemplate at least one more rate hike before concluding its monetary tightening campaign in an effort to beat down inflation.
Since March 2022, the Federal Reserve has implemented 11 interest rate hikes, raising them to a range of 5.25% to 5.5%. This is the most aggressive fight against inflation that the Fed has carried out since the 1980s. In his address later on Wednesday, Fed Chair Jerome Powell is expected to note that the job to cool inflation to the Fed’s 2% target is not yet complete, thereby opening the door to further hikes.