Fed Leaves the Door Open for Rate Hike This Year

The recent FOMC meeting highlighted a rebound in the U.S. economy and maintained the possibility of a rate hike later this year. The Fed’s statement reflected that “near-term risks to the economic outlook have diminished.”

While the Fed chose to keep interest rates unchanged during Wednesday’s meeting, it indicated that the inflation outlook could influence future decisions. Currently, the likelihood of a rate increase in September is low, and November has been excluded as a viable option due to the upcoming U.S. elections. This scenario positions December as the most probable month for a potential rate hike this year, with Fed funds futures suggesting a 45% chance of that occurring.