Will the Fed and BoE stay put on interest rates this week?
The US Federal Reserve is expected to maintain its key interest rates at current levels this week with the Funds Rate target range forecast to remain between 5.25% and 5.5% for a fourth consecutive meeting.
Fed funds futures currently price in a 97.4% chance of no change. Then on Thursday, the Bank of England (BoE) is also set to stay put on rates. Governor Andrew Bailey and other top BoE members have been saying until recently that a rate cut would be premature. They also warned about the risks from strong wage growth, as IGTV’s Jeremy Naylor explains.
(AI Video Summary)
Interest rates meetings and announcements expected this week
This week, both the Federal Reserve (Fed) and the Bank of England (BoE) will have meetings to discuss and announce their decisions on interest rates. The Fed is expected to keep their interest rates steady, while the BoE is also likely to keep theirs unchanged. The Fed aims to maintain a stable US economy by keeping interest rates consistent. On the other hand, the BoE is cautious about lowering rates due to strong wage growth, but recent data suggests they may reconsider. Whether or not a rate cut will happen later will depend on future economic data.
Future BoE rate cut?
The market is leaning towards the possibility of a future rate cut by the BoE, as shown by the positive reaction of the FTSE 100, which is an important stock market index in London. However, the timing of any rate cut will depend on economic conditions and further data. These meetings by the central banks are highly important and will have an impact on market trends and sentiment throughout the week.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Take a position on indices
Deal on the world’s major stock indices today.
- Trade the lowest Wall Street spreads on the market
- 1-point spread on the FTSE 100 and Germany 40
- The only provider to offer 24-hour pricing
Live prices on most popular markets
- Forex
- Shares
- Indices
