The US Federal Reserve is gearing up to increase its policy rate by 0.25% on July 26, aiming to address the persistent inflation challenge. If implemented, it will mark the 11th interest rate hike since March last year, placing the lending rate between 5.25% and 5.5%, reaching the highest rate in the past 22 years. The Federal Open Market Committee (FOMC) had previously indicated the possibility of two more rate increases this year.
US Federal Reserve’s Upcoming Policy Rate Increase to Tackle Inflation
However, experts and traders are closely watching Federal Reserve Chairman Jerome Powell for his next move. Inflation rates have been gradually declining since the decision to halt the hike in June but remain above the Federal Reserve’s long-term target of 2%. Additionally, unemployment figures have reached remarkably low levels, while economic growth for the first quarter has been revised, primarily due to increased consumer spending.
11th Interest Rate Hike Looms on July 26
Opinions are divided on future rate hikes, with some speculating that Powell may take a cautious approach, indicating that further rate increases are unlikely for the time being. There is also a possibility of the interest rate hike in September being postponed. The focus now remains on Powell’s statements and the Federal Reserve’s strategy to navigate the economic landscape amidst inflationary pressures.
