Fed Quiet Period Hides Rate Decision Uncertainty
The US Federal Reserve has entered its quiet period ahead of a potential rate increase. The Fed's self-imposed blackout window, which began on Saturday and will run until September 17, prohibits central bankers from making public remarks on policy.
Despite the uncertainty surrounding a rate hike, about 60% of traders believe the Fed will deliver an increase of a quarter of a point on September 16. This would raise its target range for the federal funds rate to 3.75% to 4%, according to CME Group data.
Fed Governor Christopher Waller suggested that a rate increase is not certain, stating 'I would consider a rate hike if inflation comes in hot.' Waller also mentioned that he would be willing to support holding the policy rate at its current level if he saw continued progress towards the Fed's 2% inflation target.
The upcoming Consumer Price Index inflation report this week will be the final major inflation print policymakers receive before their September 15-16 meeting. The White House has increased pressure on Fed Chairman Kevin Warsh to lower interest rates, with President Donald Trump threatening to use tariffs if he doesn't comply.