As we advised you in yesterday’s post, the Fed increased their funds target rate by 0.25%. This move takes the target range to 5.25%- 5.50%, the highest in 22 years. This is the 4th rate hike in 2023 and the 11th increase since March 2022.
The Fed will now keep its options open. Inflation is still above the Fed’s 2% target. May’s core personal-consumption expenditures index, a gauge the Fed uses to measure progress in its fight against rising prices, rose 4.6% year over year. That means an additional rate hike of 0.25% in September will still be a possibility unless data in August will change significantly.
Listening carefully to Fed Chair Powell’s comments that will be made in his press conference today for any clues.
Sven Franssen