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.
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.
Federal Reserve policymakers are not eager to raise interest rates, but they are cautious about declaring victory as they monitor data such as inflation and job growth; most do not expect a rate hike at the upcoming policy-setting meeting.
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.
J.P.Morgan Asset Management predicts that there will be no more interest rate hikes from the U.S. Federal Reserve due to downward-trending inflation data.
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.
Goldman Sachs predicts that the Federal Reserve will not raise interest rates at its upcoming annual meeting due to favorable inflation news and projected economic growth, but they expect a further hike later in the year.
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 positive momentum surrounding Bitcoin's price is fueled by expectations that the Federal Reserve will not hike rates again this year, while market participants remain optimistic despite the strength of the United States Dollar Index.
Bitcoin and other cryptocurrencies saw a rise in value as traders placed bullish bets ahead of the Federal Reserve's interest rate decision. However, these bets might be premature.
The Federal Reserve's upcoming rate decision is expected to have little impact on Bitcoin and traditional markets, with low volatility predicted due to the central bank's data-dependent stance and lack of surprises anticipated.
Stock futures traded lower as the Federal Reserve held interest rates steady but hinted at the possibility of a rate hike later this 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.
