The Federal Reserve’s interest rate decision is set to be the major highlight of the week. While the market is anticipating a rate cut, Federal Reserve policymakers are expected to engage in a challenging discussion on this matter, particularly due to ongoing inflation concerns stemming from rising prices and a sluggish job market.

Last week, the Consumer Sentiment Index from the University of Michigan indicated a positive shift, climbing to 53.3 from 51, surpassing expectations. However, this improvement isn’t enough for consumers, who are still troubled by high prices and poor job conditions.

Recent comments from policymakers reveal their uncertainty regarding the next steps.

The market predominantly predicts a 25 basis point reduction, pricing nearly an 85 percent likelihood to a rate cut that has risen from 30 percent previously. Additionally, private sector job data reflects weakness in the labour market, which could factor into a potential rate decrease by the Fed.

Another significant element of this meeting and report will be the discussion of the projected interest rate cuts for 2026. Following the September dot plot, which indicated three possible rate........

© Business Recorder