July 6th, 2023 7:00am PDT
(PenniesToSave.com) – In a recent development, the Federal Reserve is contemplating a potential interest rate hike later this month after previously deciding against it in June. While there remains a small possibility of no change, market projections align closely with the Fed’s expectations, suggesting an imminent increase in rates.
In the last meeting, a few officials suggested raising rates by 0.25% in June, while others showed potential support for this decision.
During the June 13-14 meeting, all 11 voting members of the interest rate committee unanimously decided to keep current rates unchanged. However, they also expressed the potential for two rate increases within the year.
The Federal Reserve’s recently disclosed meeting minutes offer insights into upcoming interest rate increases. Ryan Sweet, Chief Economist at Oxford Economics, points out that the presence of opposing viewpoints within the records indicates the central bank’s commitment to ongoing monetary policy tightening.
The Federal Reserve still has concerns about low inflation rates, which have been stubbornly below the target of 2%. This concern indicates a likelihood of keeping interest rates high to mitigate the potential for price hikes.
Based on the CME FedWatch Tooll, which analyzes rate change probabilities, there is a high chance of an interest rate increase at the July meeting.
Fed Chief Jerome Powell emphasized in his testimony before Congress that the battle against inflation will continue and that rate increases are expected before the end of the year. Several indicators also suggest the likelihood of another hike, and additional insights may be provided by the Federal Reserve leading up to their meeting.