The Federal Open Market Committee (FOMC) later today is widely expected to hold interest rates steady for a second meeting while also leaving the possibility of a 25 bp rate hike at the December meeting if U.S. economic growth remains buoyant. The FOMC’s rate decision and post-meeting press conference by Fed Chair Powell will be scoured for clues as to the future of Fed policy.
Fed Chair Powell has said policymakers would prefer to wait to evaluate the impact of past rate increases on the economy and see more economic data before deciding on additional rate hikes. With inflation still well above the Fed’s 2% target and economic growth near a 2-year high, Fed Chair Powell today may signal higher for longer interest rates. Jeffries LLC said the Fed will signal “a hawkish pause as the economy is doing well and inflation hasn’t gotten to target yet. They more or less have to continue to say we may need to raise rates one more time.”
