Federal Reserve statement and interest rate decision, August 1 2018

Federal
Reserve Board Chairman Jerome Powell
Chip Somodevilla/Getty

The Federal
Reserve, in a policy statement due at 2 p.m. ET, is
widely expected to announce that it kept its benchmark interest
rate unchanged.

The statement comes after a two-day meeting of the Federal Open
Market Committee, which decides on monetary policy. Traders
see a 92% probability that the Fed will raise the fed funds rate
to a range of 2%-2.25% in September, according to Bloomberg.

That’s in line with its practice of only making big changes when
there’s a scheduled press conference. 

Wednesday’s statement, therefore, may not contain any significant
tweaks to the Fed’s views on the economy, and on the trajectory
of interest rates.

During his congressional
testimony in mid-July, Fed Chairman Jerome Powell said
that, with appropriate monetary policy, the job market would
remain strong and inflation would stay around the 2% target for
“several years.” He said it’s difficult to predict the outcome of
the ongoing trade disputes, but added that a prolonged
trade war would hurt the economy.  

With seven rate rate hikes in the bag since the financial crisis,
the Fed is contemplating whether to remove language in its
statement that continues to describe borrowing costs as low.
Minutes of its meeting in June showed that some FOMC officials
debated how communications may evolve if the economy continues to
make progress and is able to withstand higher rates.  

More to come, refresh this page at 2 p.m. ET for the latest.

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