The Federal Reserve is expected to keep interest rates unchanged in their upcoming meeting, marking the first time since the central bank started tightening monetary policy in March 2022.
However, analysts say that the Fed may indicate that more rate increases are coming after assessing the stability of the financial system, the state of the economy, and inflation levels. Despite recent reports on employment and core inflation, there is still uncertainty, leading experts to suggest proceeding cautiously.
The Fed is due to release their policy statement and economic projections on Wednesday, with Fed Chair Jerome Powell holding a press conference afterwards.
While the Fed is likely to forego an increase in borrowing costs, they may still signal one or two quarter-percentage-point hikes by the end of 2023.
The decision is viewed as a compromise, reflecting the uncertainty around the economy and inflation levels. However, this does not imply that rate hikes are on a long pause or that rate cuts are expected anytime soon.
