Fed Expected To Leave Rates Unchanged
Fed to keep rates in 3.50%-3.75% range
There is a growing sense that new Fed Chair Kevin Warsh must balance competing political and policy pressures if he is to stay on the right side of a dovish US president while also managing a Federal Open Market Committee that has become increasingly hawkish.
Regardless, the Federal Reserve is widely expected to leave policy unchanged within its current 3.50%-3.75% target range for the federal funds rate when it concludes its two-day meeting on Wednesday, 29 July.
Although JPMorgan's Michael Feroli said his bank was aligned with the consensus for no change, he warned the decision could prove more contentious than previous meetings.
With some policymakers growing increasingly impatient over above-target inflation, he expects at least two hawkish dissents from Beth Hammack and Lorie Logan.
A handful of analysts have suggested there is an outside chance either Governor Lisa Cook or Michael Barr could also dissent, albeit to reinforce the Fed's institutional independence rather than to advocate a different policy stance. "There are sound arguments for hiking and holding, with the difference usually coming down to one's inflation forecast," Feroli said. "We think the strongest case for holding is that a hike would send a confusing signal about how the Fed responds to data." READ MORE