New Delhi: The Financial Times reported that the Federal Reserve is widely expected to raise interest rates by 0.75 percentage points at its July policy meeting. Officials such as Fed Governor Christopher Waller have indicated over the past few weeks that the central bank will raise interest rates by the same size as last month, after an inflation report showed consumer prices hit a 40-year high in June. .
The report also showed a sharp rise in so-called core inflation – which isolates the volatile food and energy sectors – due to higher rents and shelter costs. Inflation data initially pushed traders in the futures market into the potential for full percentage-point increases in prices, but investors have lowered their expectations of those levels. ,Also read: Markets fall for the second consecutive day; Sensex down 283 points in early trade,
Analysts and economists say there is little chance of the Fed deviating from expected growth of 0.75 percent, the Financial Times reported. But markets may be surprised by any clues from Chairman Jay Powell about plans for the bank’s September meeting. Futures markets are betting that the Fed’s key interest rate will be 3 percent in September, meaning an interest rate hike of 0.75 percent. But signs the Fed is concerned about weak economic data could dampen expectations. ,Also read: Gold Rate Today, July 26: Check Yellow Metal Rates In Your City,
Eurozone inflation is set to rise again when July’s data is released on Friday. Consumer prices in the eurozone rose at an annualized pace of 8.6 percent in June, the highest rate since the existence of the euro currency.
“We expect inflation to remain undesirably high for some time, due to energy and food prices and pipeline pressure across the pricing chain,” European Central Bank President Christine Lagarde said at a bank meeting last week. The Financial Times reported that announced a 0.5 percent increase in the key policy interest rate.