Fed Likely To Raise Rates Again, Claims CNN Analyst

A bevy of possibly market-moving events are in store for investors this week, Krystal Hur reported for CNN.

Photo Insert: Powell and other officials have hinted that another rate hike in September could be on the table.

The Fed begins its two-day July meeting on Tuesday (Wednesday, July 26, in Manila.) The central bank is largely expected to raise interest rates by a quarter point on Wednesday after pausing in June.

Traders expect a nearly 100% chance of such an outcome as of Friday afternoon, according to the CME FedWatch Tool.

With expectations for July’s decision mostly in consensus, investors will watch for any commentary Fed Chairman Jerome Powell has to deliver on where the central bank will take rates from there.

“If they continue to put their foot on the brake to try to slow the economy down, and they get language around that this week, that would be problematic” for markets, said David Smith, chief investment officer at Rockland Trust.

Already, Powell and other officials have hinted that another rate hike in September could be on the table.

Fed Governor Christopher Waller earlier this month reiterated the widely-held view among Fed officials that two more rate hikes are needed this year and suggested that the central bank could want to get rate hikes over with as soon as possible.

The latest Personal Consumption Expenditures (PCE) price index data for June is due just two days after the central bank delivers its interest rate decision for this month.

While a bevy of companies are slated to report earnings next week, investors will closely watch results from Alphabet, Microsoft, and Meta Platforms.

That’s because these companies have large weightings in the major indexes that have become particularly outsized this year due to an artificial intelligence-driven rally.

During the first-quarter earnings season, the market tended to have a larger reaction to companies that reported disappointing results than it did to companies that exceeded expectations.

Some investors say that trend could happen again with Big Tech firms whose stocks have soared into the stratosphere this year.

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