US Fed Meeting Looms as Experts Debate Rate Hikes and Market Impact

The US Federal Reserve's upcoming meeting on July 29 is expected to be closely watched by investors and economists, as it may decide to hold interest rates steady or surprise with a rate hike. The majority of experts believe the Fed will keep rates unchanged, but some hawkish factions within the committee have been pushing for higher interest rates.

The current inflation rate in the US is 3.5% year-on-year, below expectations after rising by 4.2% in May. However, this may be premature to assume that the Fed will be comfortable with the current level of inflation. The new Fed Chair, Kevin Warsh, has repeatedly said that restoring price stability and bringing inflation back to the Fed's 2% target are his top priorities.

Dr Joseph Thomas, head of research at Emkay Wealth, stated that most market participants believe the Fed may leave rates unchanged in this meeting, with a possible rate hike possibility in September or December. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that even though inflation is a concern, the Fed is likely to hold rates now and move to a rate hike in the next meeting.