Fed Chair Kevin Warsh Faces a Committee Where 9 of 19 Members Are Signaling Higher Interest Rates This Year
A split Fed and an unclear interest rate policy path aren't good for stocks.
Overview
In June, the Federal Reserve left its benchmark rate unchanged for the sixth consecutive meeting. Whether that streak extends to seven meetings when the Fed meets July 28-29 is a real mystery.
Based on the Fed's dot plot report released last month, nine of the 19 policymakers say that they predict at least one rate hike before the end of 2026. Six of them supported two rate hikes by year-end. It was only a few months ago that no one expected a rate hike. Now, the nearly 50/50 split within the committee makes it very unclear whether holding or hiking is going to be the path for the remainder of the year.
Details
The annualized inflation rate dropped to 3.5% in June, removing some immediate pressure from the Fed's policy choices. But the ongoing Iran war has pushed oil prices back to around $100 a barrel. That could very well mean the lower inflation reading is only a temporary blip.
Source
Originally published at www.fool.com.