Advertisement

Markets cautious ahead of Fed rate decision

(WEAU)
Published: Sep. 26, 2018 at 5:20 AM CDT
Email this link
Share on Pinterest
Share on LinkedIn

Financial markets are subdued as investors look ahead to the Federal Reserve's latest policy meeting, at which it is expected to raise its main interest rate for the third time this year.

Stock markets are mixed, with Wall Street futures up a modest 0.2 percent, ahead of the meeting. The dollar is steady against major currencies like the euro and yen.

The Fed is expected to lift its key rate on Wednesday from a range of 1.75-2 percent to a still-low 2-2.25 percent. The move reflects the U.S. economy's resilient expansion amid tax cuts and government spending. There are questions, however, whether the trade dispute could hurt the outlook.

Investors will keep an eye on a news conference by Chairman Jerome Powell for more clues to the Fed's views.


The Federal Reserve is set Wednesday to raise interest rates for a third time this year and possibly modify the likely direction of rates in the months ahead.

The big question is whether the strong U.S. economy, which has been fueled this year by tax cuts and increased government spending, could weaken next year, especially if President Donald Trump's trade fights begin to inflict damage and the benefits of tax cuts start to fade.

If the Fed finds that prospect likely, it might signal Wednesday that it expects to slow its rate increases next year.

The Fed's key short-term rate now stands in a range of 1.75-2 percent after two quarter-point increases in March and June. A similar rate hike Wednesday would raise that range to a still-low 2-2.25 percent.

Latest News

Latest News