According to Yardeni Research, the Fed is expected to keep interest rates unchanged at the Federal Open Market Committee (FOMC) meeting on July 30.
According to research data, the likelihood of a rate cut remains at only 4.7%. Although favorable employment data released in June delayed expectations for a short-term rate cut, the moderate inflation report expected in September is likely to reinforce signals about the possibility of a rate cut.
While the market is growing with better-than-expected Q2 earnings data being released, there are opinions that if the Fed delivers a dovish message next week, the stock market may gain new momentum.
Meanwhile, although Fed Chair Jerome Powell is said to be under increasing pressure from the White House to lower interest rates, market experts and economists do not expect the central bank to take a dovish move in the short term.
One of the most important reasons for this is that Powell cannot make decisions on his own at the Federal Open Market Committee (FOMC), the monetary policy-setting body. He is just one member of a 12-member board.
Furthermore, the Fed has a dual mandate: to control inflation while ensuring maximum employment. The current strong labor market does not create an environment that demands a rate cut. Moreover, any new tariffs that may be imposed in the near future could increase inflation.
The Federal Reserve has maintained its target for the federal funds rate at a range of 4.25% to 4.50% since December. The bank also kept rates unchanged at the June meeting, making the decision based on the rigidity of inflation, the impact of trade tariffs, and the need for more data.