The U.S. Federal Reserve will set the target for short-term interest rates on June 14 at 2pm EST. It could be the first time that the Fed chooses to hold rate steady in 18 months. However, this isn’t a foregone conclusion, interest rate futures currently imply a 1 in 4 chance that the Fed decides to increase rates once again, so a rate hike is not fully off the table, especially with new a CPI report coming on the first day of the Fed meeting.
In recent public statements, Fed officials have argued that monetary policy is currently restrictive, but that core inflation remains too high. As such, the Fed still has a bias towards increasing rates further if needed, but at least for the June meeting, may adopt more of a patient position in monitoring the lagged effects of past rate moves.
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