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.
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