The Fed’s Plan Ahead 🤔

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The Fed’s Plan Ahead

After months of debate surrounding inflation and the future of the stock market, one quote has begun to loom over market-watchers’ heads: Don’t fight the Fed. This week, investors will be waiting diligently for the highly anticipated Federal Reserve meeting beginning on Tuesday, with policy rate decisions to be expected on Wednesday at 2:00 p.m. ET.

Following the Jackson Hole Symposium last month, investors reacted negatively to hawkish comments by Fed Chair Jerome Powell, which lead experts to suggest a potential 50 to 75-basis-point hike in interest rates in September. Recently, the inflation rate rose 8.3% in August from a year earlier; although this was down from the 8.5% increase in July, these numbers were not as low as economists had hoped for. Worry over rising costs for food, rent, and health care has created suspicion that we can even see the Fed decide on a 100-basis-point hike in interest rates on Wednesday as a hawkish bid to curtail the economy.

Currently, most experts still expect a high probability of a 75-basis-point lift in rates, with the Fed continuing to raise rates beyond September until they can reach their target goal for inflation at 2%. Investors will also be keeping their ears open for what Powell has to say following the Wednesday meeting and the forecasted projections from the U.S. central bank members.

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

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