Markets will be closely watching the United States Federal Reserve's interest rate decision on Wednesday. Investors will look for comments from Fed Chair Kevin Warsh about the future path of monetary policy following the conclusion of the critical Federal Open Market Committee (FOMC) two-day meeting.
As per a Reuters report, a growing number of major brokerages believe that the US Fed could raise interest rates this time as rising oil prices and renewed tensions in the Middle East have increased inflation risks. Brent crude climbed to $100 a barrel last week, raising concerns that inflation could stay above the Fed's 2% target.
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The report added that firms such as BofA Global Research and Deutsche Bank still expect rates to remain unchanged for now. BofA also warned that keeping rates steady could hurt the Fed's inflation-fighting credibility. Both of these institutions expect rate hikes to begin in September.
This sentiment is largely shared by the broader market as well. Currently, the stakeholders see a 40% chance of a 25-basis-point rate hike on Wednesday, up from 20% a week ago, according to LSEG data. Traders see almost a 95% probability of a hike by September.
“We would not be surprised if they raised rates... to demonstrate their inflation-fighting resolve," strategists at UBS Global Research told Reuters on Friday, adding that Fed Chair Warsh's influence would likely be a deciding factor. The new Fed chief has said that he is committed to lowering inflation, but hasn't indicated whether he supports increasing interest rates to do so.
US Fed Rate Decision: July FOMC Meeting Date And Time
The US Federal Reserve's July FOMC interest rate decision will be announced on Wednesday, July 29 at 2:00 p.m. ET (11:30 p.m. IST).
US Fed Rate Decision: When And Where To Watch Kevin Warsh's Speech
Following the conclusion of the meeting and announcement of the decision, Fed Chair Kevin Warsh is expected to hold a press conference half an hour later.
Warsh's press conference will be streamed live on NDTV Profit's YouTube channel. The Federal Reserve will also livestream the press conference on its official platforms, allowing the public and investors to tune in.
You can watch the streaming on the Federal Reserve YouTube channel here.
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