Fed is expected to raise rates

FED IS EXPECTED TO RAISE RATES

FED IS EXPECTED TO RAISE RATES

Officials of the US Federal Reserve have evaluated that an increase in interest rates would be appropriate until inflation gets to lower levels significantly, according to the minutes published on Wednesday of its last meeting.

“The inflation remaining well above the committee’s objective, the participants judged that going to a restrictive position of policy was necessary to respond to the committee’s legislative mandate to promote maximum employment and price stability,” showed the minutes of the meeting from July 26 to 27.

The FED increased its rate by 75 basis points both in June and July, the greatest consecutive increases since the Central Bank began using the fund rate as its main monetary policy tool in the early 1990s.

Chief Market Strategist at Crossmark Global Investments-Victoria Fernandez said, “For me, there is not enough evidence for the Fed to make a great axis from where they are. I still think they are considering 50, 75 basis points at the September meeting”.

“Nothing comes out of the economic report from CPI or PPI in today’s session will change it at this time. I think we still have enough way to go, “she added.

Investors will seek advice from the President of the Fed, Jerome Powell, on what the Fed could do at its next meeting in September.

The inflation data of the next CPI report in September will be essential for the markets, she added.

The central bank considers that slowing the rate of policy level is likely to be right at several points, mentioned in the minutes.

“Some participants indicate that, once the policy level has reached a fairly limiting level, it is likely to be suitable for maintaining that level for some time to ensure that inflation is strongly on the 2% path,” noted.

FED IS EXPECTED TO RAISE RATES