In an interview on the current state of the US economy, Minneapolis Fed President Neel Kashkari stated that the inflation outlook is positive and we are on the way to avoiding a recession. However, he stated that there may be a slight increase in unemployment while fighting inflation.
Kashkari announced that he has not reached a firm decision on raising interest rates and that the data will guide the Federal Open Market Committee (FOMC) meeting in September.
He also stated that the US economy is resistant to various shocks and emphasized that they will closely monitor the effects of a possible shock in the future.
Markets Expect Rates to Stay Stable
According to CME Group’s FedWatch data, the market doesn’t care much about the Fed, who gave a hawkish outlook at the last interest rate meeting, suggesting that there might be an interest rate hike again. According to the data compiled from the market movements, at the Fed meeting, which will take place 51 days later, on September 20, keeping the interest rates fixed is currently priced around 80 percent.
However, the markets have not completely ruled out the possibility of an interest rate hike by the Fed. Investors see the probability of a 25 basis point rate hike for the Fed’s September 20 meeting at around 22 percent.
