US Fed Meeting LIVE: The Federal Reserve is expected to keep interest rates unchanged on Wednesday, even as some investors are watching for a surprise rate hike.
The central bank has kept rates steady this year, hoping that tariff-related price increases and the impact of the Iran war will fade. But with inflation still above the Fed’s 2% target, pressure is growing to keep rates higher for longer to cool demand.
Much of the uncertainty stems from Fed Chair Kevin Warsh’s reluctance to give clear signals about where interest rates are headed. Time and again, he has reiterated that he wants to bring inflation down, but has not said whether he would support raising rates to achieve that.
The probability of a hike implied by federal funds futures reached 40% in the run-up to the meeting. As of Tuesday afternoon, investors saw about a 35% chance, a rare level of uncertainty on the eve of a Fed meeting.
A hike would bolster Warsh’s credibility, said Derek Tang, an economist at Monetary Policy Analytics. It would show he’s serious about his repeated pledge to restore price stability, he said. Leaving rates unchanged risks cementing an “all hat and no cattle” reputation, Tang said.
The Fed will release a post-meeting statement at 2 p.m. Wednesday in Washington, and Warsh is scheduled to hold his second post-meeting press conference 30 minutes later. He’s likely to face a range of questions on the economy and rates, as well as his plans for enacting broader changes at the central bank.
The Fed won’t release economic forecasts and rate projections at this meeting.
US stocks rise ahead of Fed announcement
US stocks drifted higher ahead of earnings from two of the world’s biggest spenders on artificial intelligence and a US interest-rate decision where markets still see room for a hike.
S&P 500 futures rose 0.2%. Those for the Nasdaq 100 were flat after the latest selloff in chipmakers left the index on the brink of a technical correction. Treasuries stalled after three days of gains, with traders assigning about a 30% chance of a Federal Reserve rate increase. The dollar barely budged.
Gold falls to its lowest level this week
Gold fell to its lowest level in one week on Tuesday, weighed down by a firm dollar, while investors awaited the US Federal Reserve’s interest rate decision
Spot gold fell 1.2% to $4,026.49 per ounce by 2:25 p.m. EDT (1825 GMT), after touching its lowest level since July 21 earlier in the session. U.S. gold futures for August delivery slid 0.9% to settle at $4,038.70.
Two key things to watch:
Will the Fed surprise markets with a rate hike on Wednesday?
If the Fed holds rates, will investors expect higher rates for longer?
