Fed: why don’t analysts see an increase in interest rates in next Wednesday’s decision (20)?

2023-09-19 15:42:00

Next Wednesday (20), the Federal Reserve (Fed), the North American Central Bank, informs its monetary policy decision.

The Federal Reserve’s interest rate monitor designed by Investing.com points an estimate that the 0.25 pp increase cycle will not be resumed with a probability of 100%, against a 92% chance in the previous week’s calculation.

The monetary authority had paused its tightening at the meeting held in August.

Now, directors of the FOMC (Federal Open Market Committee), which stands for Federal Open Market Committee, have the mission of making decisions that are not easy.

André Carvalho, portfolio director at Acura Capitalfor example, assesses that the indicators released in recent weeks support the thesis of a soft-landing in the economy, “with a significant improvement in the composition of inflation”.

With this, the executive waits for the interest rate to be maintained at the current level. “We hope the FOMC does not raise interest rates at this meeting,” he commented.

In your daily reporta Raise Investments recalled that Jerome Powell, president of the Federal Reserve (Fed), knows that continuing to tighten interest rates “may have negative social consequences”, but that he cannot ignore the fact that allowing inflation to run “well above targets also has devastating impacts on economies.”

The chief economist of NomadDanilo Igliori, recalled that “the August indicators did not substantially change the framework of the last meeting”.

In the executive’s assessment, local economic activity showed resilience and well-behaved inflation, but still above the target.

“Debates will continue around the so-called monetary policy lags and the risks that activity will slow down more quickly from now on”, he pointed out.