AS-China Still Hot, The Fed Signals to Hold Interest Rates This Month
The Federal Reserve (The Fed) is projected at the Federal Open Market Committee (FOMC) meeting this month, specifically on Friday (20/06), to maintain interest rates in the range of 4.25 to 4.5%.
CME FedWatch predicts the likelihood of holding interest rates for the umpteenth time at 95.3%. In addition, the potential for a 25 basis point rate cut in June has only a 4.6% chance, indicating strong market confidence in stable interest rates.
Nevertheless, Fed Deputy Governor Christopher Waller stated that there is still a chance for the Fed to cut interest rates by the end of this year. However, the Fed will be looking at trade policies between the US and China, employment levels, and securities holdings.
Currently, the US accuses China of violating trade agreements made by both countries, leading to uncertainty in tariff policies and pressuring interest rate determinations this month.
Then, the Fed is committed to bringing inflation down to a target of 2%. Powell has promised to keep prices stable. Moreover, he will monitor inflation in the US.
