(MENAFN- AFP) The Federal Reserve began two days of interest rate deliberations Tuesday amid widespread expectation that it will pause rate hikes as it attempts to fight inflation without sinking the US economy.
The rate-setting Federal Open Market Committee (FOMC) has raised interest rates 11 times since March 2022 to tackle runaway inflation, which remains stuck above the Ffed's long-term target of two percent despite having fallen sharply.
The FOMC has significantly slowed down the pace of its hikes in recent months as the impact of existing hikes begins feeding through into the US economy.
"Fed officials have signaled that they can afford to proceed carefully at this point and will leave the target range for the funds rate unchanged at 5.25-5.5% at their September meeting," Goldman Sachs economists wrote in a recent note to clients.
Traders have assigned a 99 percent probability that the Fed will hold rates steady on Wednesday, according to data from CME Group.
The FOMC meeting features a full slate of voting members for the first time since February, when former vice chair Lael Brainard left the Fed to lead President Joe Biden's National Economic Council.
Fed Governor Philip Jefferson was recently confirmed to fill the vacant number two slot at the US central bank, while former World Bank executive Adriana Kugler was also appointed as a Fed governor.
Investors will be closely scrutinizing the actions of the Fed following the recent changes at the top, which also include the appointment of current governor Lisa Cook to serve a full 14-year term.
Alongside its interest rate decision, the Fed will also publish updated economic forecasts.
Analysts broadly expect the Fed to raise its economic growth forecast for 2023 due to strong figures in the first half of the year, and to narrowly keep alive the prospect of another interest rate hike later this year.
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