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Fed Likely to Pause Rate Hikes This Week, But May Resume Tightening If Needed to Sustain Disinflation

  • The US Federal Reserve is expected to hold interest rates steady this week after mixed economic data, but may hike again if needed.

  • Inflation has ticked up due to higher energy costs, keeping pressure on the Fed, but economists think the tightening cycle is nearly done.

  • Recent data shows strong growth and cooling inflation, suggesting the Fed may achieve a soft landing by avoiding recession.

  • Policymakers see a "golden path" opportunity for a soft landing but may forecast further hikes to keep tightening threat alive.

  • Markets expect a pause in September but are split on whether there will be a final rate hike in November to sustain disinflation.

gulfnews.com
Relevant topic timeline:
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 Federal Reserve meeting in September may hold the key to the end of the tightening cycle, as markets anticipate a rate hike in November, aligning with the Fed's thinking on its peak rate. However, disagreement among Fed policymakers regarding the strength of the economy and inflation raises questions about the clarity and certainty of the Fed's guidance. Market skeptics remain uncertain about the possibility of a "soft landing," with sustained economic expansion following a period of tightening.
The former president of the Boston Fed suggests that the Federal Reserve can stop raising interest rates if the labor market and economic growth continue to slow at the current pace.
The European Central Bank is expected to maintain interest rates on September 14, although nearly half of economists anticipate one more increase this year in an effort to reduce inflation.
The Federal Reserve is expected to maintain its benchmark interest rate and may not cut it until the second quarter of 2024 or later, according to economists in a Reuters poll.
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 is expected to keep its key interest rate steady in its upcoming meeting and provide insights on the duration of high interest rates.
A survey conducted by Bloomberg shows that most economists expect the Federal Reserve to hold interest rates steady until May and project one additional rate increase this year, although they do not believe the Fed will actually implement another increase.
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.
Federal Reserve officials are expected to keep interest rates unchanged at their policy meeting this week but will leave the door open for another rate hike, as they remain cautious about inflation and aim to keep financial conditions tight.
U.S. Treasury yields remained steady as investors awaited fresh economic data and the conclusion of the Federal Reserve's September meeting, with expectations of unchanged interest rates but uncertainty about future policy.
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 Federal Reserve is expected to keep interest rates steady and signal that it is done raising rates for this economic cycle, as the bond market indicates that inflation trends are moving in the right direction.
The Federal Reserve is expected to maintain steady interest rates at its two-day meeting, but investors will be focused on policymakers' economic forecasts, while metals prices remain mixed and U.S. stock markets anticipate the release of the Fed's policy projections.
The US Federal Reserve holds interest rates steady at 5.25% to 5.50%, projects higher rates for next year, and expects stronger economic growth, causing a slight drop in Bitcoin's price.
The Federal Reserve held off on raising interest rates at its September meeting, but economic activity and rising energy prices are likely to drive their decision in the next meeting.
The Federal Reserve has decided to pause interest rates while closely monitoring economic data, particularly unemployment and wages, as concerns about a potential recession and inflation remain.
The Federal Reserve has decided to keep interest rates steady, giving borrowers a break after 11 rate hikes and aiming to tame inflation while avoiding a recession.
The Federal Reserve has paused its campaign of increasing interest rates, indicating that they may stabilize in the coming months; however, this offers little relief to home buyers in a challenging housing market.
The Federal Reserve has kept interest rates steady, but economists are skeptical that a soft landing for the economy is guaranteed due to high inflation and continued economic growth.
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.
J.P. Morgan strategists predict that the Federal Reserve will maintain higher interest rates until the third quarter of next year due to a strong economy and continued inflation, with implications for inflation, earnings, and equity valuations as well as potential impact from a government shutdown.
The Federal Reserve will continue to raise interest rates as inflation resurfaces, according to Wall Street investor Caitlin Long, with big corporations benefiting while other sectors of the US economy are already in recession.
The Federal Reserve's decision to keep interest rates high for a longer period has sparked a debate among financial experts over the possibility of an impending recession.
The Federal Reserve may not raise interest rates again this year due to an already uncertain political climate in Washington, as well as a cooling economy, slowing inflation, and potential negative impacts from high interest rates and a government shutdown.
The Federal Reserve is facing a tough decision on interest rates as some officials believe further rate increases are necessary to combat inflation, while others argue that the current rate tightening will continue to ease rising prices; however, the recent sell-off in government bonds could have a cooling effect on the economy, which may influence the Fed's decision.
The Federal Reserve is expected to keep interest rates higher for longer due to the potential inflation caused by rising oil prices amid the escalating war between Israel and Hamas, according to billionaire venture capitalist Chamath Palihapitiya.
Wall Street and policymakers at the Federal Reserve are optimistic that the rise in long-term Treasury yields could put an end to historic interest rate hikes meant to curb inflation, with financial markets now seeing a nearly 90% chance that the US central bank will keep rates unchanged at its next policy meeting on October 31 through November 1.
Markets are increasingly expecting a Fed pause in interest rate hikes, with the chance of a rate increase in November dropping to 15.8%, down from 23.1% a week ago and 38.4% a month ago, as volatile Treasury yields play a major role in shaping market expectations.
The report on consumer prices in September shows that inflation remains steady but still poses challenges, leading economists to predict that the Federal Reserve will keep the possibility of a final interest rate increase this year open.
Consumer prices in the US grew at the same pace in September as in August, indicating that progress in controlling inflation may be stalling, prompting Federal Reserve officials to remain cautious with interest rate decisions.
The Federal Reserve will continue with its 'higher-for-longer' interest rate narrative unless there are signs of a slowdown in the consumer sector.