The Federal Reserve will announce its interest-rate decision tomorrow – and most observers are expecting the central bank to leave things pretty well alone.
The Fed is widely expected to hold rates steady this week, according to a Reuters report. While inflation has been sluggish, that has been balanced by recent economic growth, which has been stronger than expected. Markets are betting that the Fed’s recent statements that it would take a “patient” attitude toward monetary policy mean that it will hold rates steady until a major economic shift – one way or the other – compels a change.
“We do not expect a big change in tone” from the central bank’s mid-March policy statement, JPMorgan economist Michael Feroli wrote in an analysis. Feroli said that the Fed would likely be “more upbeat on growth, though with a more cautious reading of recent inflation developments.”
President Donald Trump has repeatedly demanded that the Fed cut rates – even though the central bank’s recent policy has been to raise them as the economy strengthens. The Fed held rates steady at its March meeting, and the odds against a rate hike currently stand at 97%, according to Reuters. Since March, however, most new economic data has been positive – making it unlikely that the central bank will cut rates as the president demands.