If you’re wondering when the Fed will meet this year, there are a number of key events to look for. First up is the announcement of a half-point increase in the federal funds rate in September. It’s expected to be a modest hike compared to the three-point increase that’s been announced previously, but if inflation remains too high, it’s likely the Fed will hike rates more gradually.
What Is Fed Meeting?
The Federal Reserve will likely raise the federal funds rate by a half-point in September, which will mean higher mortgage rates. Mortgage rates currently range from 3.25 to 3.25%, but a rate hike will push them up to around 4% by the end of the year. The Fed’s next meeting is expected to be in September, when the probability of a half-point increase has reached the highest since June. On the other hand, some analysts predict that the Fed will raise rates by a full percentage point.
The Fed’s next move depends on the unemployment rate and inflation. Although consumer prices are growing at the fastest pace in 40 years, they showed some troubling signs in August. Meanwhile, the job market is tight. This is what’s known as stagflation.
Inflation Remains Unacceptably High
The recent consumer price index from the Bureau of Labor Statistics showed that the overall cost of goods and services increased 9.1% over the year ending in June. This is the highest increase in four decades. The most significant factors driving the increase were the cost of gasoline, food, and shelter. While gas prices have dropped slightly since mid-June, they remain unacceptably high. You must have the idea about the when are fed meetings this year.
The Fed could raise interest rates by a full percentage point next week, which would be the largest increase since 1984. The dollar gained 1.4 percent against a basket of foreign currencies on Friday. The Fed’s statement also came amid recent data showing that the country’s inflation rate has slowed, but remains unacceptably high. Analysts are anticipating a widespread slowdown in price increases.
Interest Rate Hikes In Fx Market
Federal Reserve officials are predicting half-point interest rate hikes at their next few meetings as they try to bring down surging inflation. But the timing of these hikes is uncertain, because they will likely be dependent on upcoming data that show the economy is slowing.
The latest FOMC minutes will be released on Thursday, and market traders have already priced in the likelihood of a half-point hike at the June meeting. The next scheduled meeting is June 14-15. A statement is expected to be released by the Fed committee and updated economic estimates 30 minutes after the meeting. After that, Fed Chair Jerome Powell will hold a press conference.
Fed officials will be under pressure to raise rates soon, and Powell has already put half-point increases on the table for this month and next. He has also indicated that officials will keep pushing until prices cool down. The consumer price index, which was released on Friday, was up 8.6% from a year ago. The core CPI rose 0.6% from the previous month.
Impact On Mortgage Rates
The Fed is not directly involved in setting mortgage rates, but their actions do have a tremendous impact on the market. One example is the use of Quantitative Easing, or QE, which is the Fed’s policy of buying Treasuries and Mortgage-Backed Securities. When the Fed makes a change in its QE policy, it can have a large impact on long-term mortgage rates, while it has little impact on short-term rates.
The Fed is also actively raising interest rates. These moves are expected to cause further increases in mortgage rates. The Federal Reserve reports its decisions in the business sections of most newspapers, and you can find these updates online.
Impact On Stock Market
Fed meetings can have a profound impact on the stock market. If the Fed cuts expectations for future economic growth or makes policy accommodations, stock prices will generally drop. This trend is known as the “Fed put.” Many investors assume the Fed will intervene at some point, based on the history of easing monetary policy after a market downturn.
Investors will analyze Powell’s remarks for clues about the economy, interest rates, and financial markets. If Powell is perceived as hawkish, the stock market will likely suffer. However, if Powell appears to be dovish, investors will likely see a cut in interest rates and stock prices will go up.