After a brief pause, the Fed is expected to raise interest rates on Wednesday, resuming the most aggressive streak of rate hikes in decades as it attempts to slow inflation.
Economists are predicting the central bank will boost its key rate a quarter of a percentage point to the range of 5.25% to 5.5%. But while the Fed hinted in June that it would implement increases at least two more times this year, some economists are questioning whether such moves are necessary as inflation continues to wane – a trend they say is driven more by supply chains flowing more smoothly and other post-pandemic factors than the central bank’s actions.
What time is the Fed meeting today?
The Fed will announce whether or not it will raise its key rate at 2:00 pm ET on Wednesday, July 26.
What is the Fed interest rate currently?
Following its most significant string of interest rate hikes in 40 years, the Federal Reserve pushed pause in June, leaving the benchmark rate in the range of 5% to 5.25%. It was the first time in 18 months that the central bank left the federal funds rate unchanged.
Protect your assets: Best high-yield savings accounts of 2023
U.S. inflation rate
Consumer prices overall rose 3% in June as compared to a year earlier. That was down from the 4% uptick the previous month, according to the Labor Department’s consumer price index.
June marked the 12th month in a row that inflation cooled as static grocery prices took some of the sting out of gas prices that were again on the rise, and rent costs that remained stubbornly high.
Broadly, prices have been all over the map. Used cars for instance have become more affordable as pandemic-related snarls in the supply chain start to unwind. But services like hair cuts and car repairs continue to cost more as employers offer higher wages to keep workers amid lingering labor shortages.
Fed decision today
Though inflation is slowing, it remains above the Fed’s 2% target. That will likely lead the central bank to implement another increase this month after leaving the key rate alone in June to allow time to evaluate the impact of its previous string of hikes.
Still, the slow down of core price increases could compel the Fed to keep rates where they are for the rest of the year.
When will the Fed lower interest rates?With more hikes expected in 2023, timeline shifts
