The Federal Reserve is expected to keep interest rates steady at its upcoming meeting but may signal a potential rate cut in September. Market indicators suggest a strong likelihood of a rate reduction during the Fed\u2019s mid-September session, with speculation centered on whether the cut will be a modest quarter-point or a more substantial half-point.<\/p>\n
The Fed has maintained its policy rate within the 5.25%-5.50% range for the past year. A half-point cut would likely require clear signs of a rapid economic slowdown that could endanger the current low unemployment rate of 4.1%.<\/p>\n
Despite aggressive rate hikes aimed at controlling inflation, the economy has shown resilience. The second quarter saw a solid 2.8% annual growth rate, and job market data remains robust, with over 8 million job openings and a decline in layoffs. Employment metrics are stabilizing at pre-pandemic levels, suggesting a balanced job market.<\/p>\n