The majority of economists polled by Reuters predict that the U.S. Federal Reserve will not raise interest rates again, and they expect the central bank to wait until at least the end of March before cutting them, as the probability of a recession within a year falls to its lowest level since September 2022.
The minutes of the Federal Reserve meeting suggest that another rate hike in 2023 is possible, although the Fed does not mention lowering rates and intends to balance the risk of overtightening policy against the cost of insufficient tightening; the market is less inclined to believe that rate hikes will occur as predicted by the Fed, with a higher chance of rates staying steady in September and a lower chance of a hike in November.
Despite recent market gains, investors are concerned that the current rally may be the last hurrah before an economic contraction, especially after the Federal Reserve indicated that it could hike interest rates twice more this year.
The Federal Reserve faces new questions as the U.S. economy continues to perform well despite high interest rates, prompting economists to believe a "soft landing" is possible, with optimism rising for an acceleration of growth and a more sustainable post-pandemic economy.
The tone of the Jackson Hole economic symposium in 2023 is expected to focus on how long rates will stay high rather than how far they may rise, as the bond market prices in a higher for longer policy path from the Fed, potentially delivering a blow to the market's expectation of a more accommodative Fed.
Two Federal Reserve officials suggest that interest-rate increases may be coming to an end, but one of them believes that further hikes may still be necessary depending on inflation trends.
Federal Reserve Chair Jerome Powell is expected to signal in his upcoming speech that the Fed plans to maintain its benchmark interest rate at a peak level for a longer period than anticipated, suggesting that any rate cuts are unlikely until well into next year, as the central bank aims to further slow borrowing and spending to reduce inflation.
Federal Reserve Chair Jerome H. Powell stated in a speech at the Jackson Hole symposium that the central bank is prepared to raise interest rates further if needed, signaling that they do not believe inflation is fully under control. The Fed will proceed cautiously and assess economic data as they determine whether to make further policy adjustments.
Federal Reserve Chairman Jerome Powell signaled at a conference of central bankers that more rate hikes could be on the way as the economy continues to run hot, despite a series of policy tightening measures, in an effort to combat persistent inflation.
The dollar is expected to continue strengthening as bond yields rise, with the Fed likely to hike rates at least once more this year, and a barrage of economic data this week will heavily influence Fed policy decisions and impact the direction of the dollar and interest rates.
Investors have been building up bets on the Federal Reserve announcing an end to its rate hikes, but the central bank's preferred inflation data and Chair Jerome Powell's comments suggest that the cycle may not be over yet.
The Federal Reserve's monetary tightening policy has led to a surge in mortgage rates, potentially damaging both the demand and supply in the housing market, according to Mohamed El-Erian, chief economic advisor at Allianz.
The Federal Reserve's preferred inflation gauge increased slightly in July, suggesting that the fight against inflation may be challenging, but the absence of worse news indicates that officials are likely to maintain interest rates.
Despite recent optimism around the U.S. economy, Deutsche Bank analysts believe that a recession is more likely than a "soft landing" as the Federal Reserve tightens monetary conditions to curb inflation.
Investors are becoming increasingly nervous due to concerns about the Fed potentially increasing interest rates, as well as rising 10-year interest rates and the VIX, which may put pressure on stocks; however, there are also positive factors emerging, such as improving S&P 500 profit estimates and a shift away from data dependence by Fed officials, which suggests a better finish to September is probable.
Bond traders are anticipating that the Federal Reserve will continue with interest-rate hikes, and next week's consumer-price index report will provide further insight on how much more tightening may be required to control inflation.
Uncertainty in various sectors, including potential strikes, government shutdowns, geopolitical tensions, and the question of future Federal Reserve interest rate hikes, is causing markets to lack conviction, but this week's inflation readings could provide direction for the markets. If inflation comes in below expectations, it may signal that the Fed will not hike rates further, while stronger-than-expected inflation could lead to more rate hikes and market volatility. Additionally, increasing energy prices and the potential strike by the United Auto Workers union add to the uncertainty.
Treasury Secretary Janet Yellen and Goldman Sachs may be optimistic about a "soft landing" scenario for the US economy, but the author remains skeptical due to factors such as a deeply inverted yield curve, declining Leading Economic Indicators, challenges faced by the consumer, global growth concerns, and the lagging impact of the Fed's monetary policy, leading them to maintain a conservative portfolio allocation.
The Federal Reserve is expected to maintain one more rate hike on the table in their updated forecasts, despite their growing faith in the prospect of an economic soft-landing.
Traders and investors are betting that the Federal Reserve will hold interest rates steady at its September meeting, indicating a shift in the market's interpretation of good economic news, as it suggests the Fed may be close to pausing its rate hike cycle despite inflation being above target levels and potential headwinds in the economy.
Federal Reserve Chair Jerome Powell is expected to maintain a cautious approach and emphasize the Fed's resolve to target inflation and keep interest rates high for an extended period at next week's policy meeting, according to economists. The general consensus among economists is that the Fed will keep rates steady and suggest a possible rate hike later this year while closely monitoring inflation and the labor market.
The Federal Reserve's restrictive monetary policy, along with declining consumer savings, tightening lending standards, and increasing loan delinquencies, indicate that the economy is transitioning toward a recession, with the effectiveness of monetary policy being felt with a lag time of 11-12 months. Additionally, the end of the student debt repayment moratorium and a potential government shutdown may further negatively impact the economy. Despite this, the Fed continues to push a "higher for longer" theme regarding interest rates, despite inflation already being defeated.
Following the European Central Bank's record high interest rate hike to 4%, there is speculation about how long rates will remain at this level, with analysts predicting a 12-month pause before any cuts are made, while also considering the impact of rising oil prices on inflation expectations in Europe and the US. The Federal Reserve is expected to hold rates steady in September, but there are divided opinions on whether another hike will be delivered this year, with markets anticipating rate cuts in 2024. Similarly, the Bank of England is anticipated to make one final hike in September as it assesses inflation and economic indicators.
The Federal Reserve is expected to signal that another rate hike may be necessary due to strong economic growth and inflation metrics, creating a difference of opinion between the equity and bond markets.
The Federal Reserve faces the challenge of bringing down inflation to its target of 2 percent, with differing opinions on whether they will continue to raise interest rates or pause due to weakening economic indicators such as drops in mortgage rates and auto sales.
The Federal Reserve is expected to keep interest rates unchanged at its meeting this week, but investors will be paying close attention to any indications of future rate increases as the central bank continues its fight against inflation.
The Federal Reserve is expected to announce a pause on interest rate hikes due to positive economic indicators and the likelihood of a "soft landing" for the economy, but future decisions will be influenced by factors such as the resumption of student loan payments and a potential government shutdown.
The upcoming U.S. Federal Reserve meeting is generating less attention than usual, indicating that the Fed's job of pursuing maximum employment and price stability is seen as successful, with labor market data and inflation trends supporting this view.
The Federal Reserve's upcoming meeting will focus on the central bank's expectations for key indicators such as interest rates, GDP, inflation, and unemployment, while many economists believe that the Fed may signal a pause in its rate-hiking cycle but maintain the possibility of future rate increases.
Wall Street fears that the Federal Reserve will push out the timing for rate cuts next year, sparking concerns of a hawkish pause and increasing selling pressure, despite a trend of rapid disinflation and the potential for a higher neutral interest rate.
Investors are more focused on the release of new forecasts from the Federal Reserve, which will reveal their views on the prospect of an economic "soft landing" and the rate environment that will accompany it.
Central banks around the world may have reached the peak of interest rate hikes in their effort to control inflation, as data suggests that major economies have turned a corner on price rises and core inflation is declining in the US, UK, and EU. However, central banks remain cautious and warn that rates may need to remain high for a longer duration, and that oil price rallies could lead to another spike in inflation. Overall, economists believe that the global monetary policy tightening cycle is nearing its end, with many central banks expected to cut interest rates in the coming year.
The possibility of a last hike in 2023 with the pause in interest rates in September may lead to the tightening and financial conditions that were not seen earlier when the Fed was raising rates faster.
The Federal Reserve's measure of inflation is disconnected from market conditions, increasing the likelihood of a recession, according to Duke University finance professor Campbell Harvey. If the central bank continues to raise interest rates based on this flawed inflation gauge, the severity of the economic downturn could worsen.
The panel discusses the upcoming Fed comments, the market's expectation of no further rate hikes in September, and the impact of high interest rates on jobs, wages, and consumer spending.
