Former Kansas City Fed President Esther George echoed the belief of many financial market participants that the US Federal Reserve may refrain from raising interest rates in the coming months. This aligns with the expectation that the Fed will maintain the current target rate of 525-550 basis points.
The central bank’s decision will consider its 2% inflation target, which is crucial for restoring price stability in the US economy. Recent data revealed a 3.7% annual inflation rate in August 2023, slightly higher than anticipated.
George emphasized the Fed’s commitment to price stability but cautioned that achieving and sustaining the inflation target might impact the labor market. She suggested that the Fed might pause rate hikes to assess incoming data, particularly regarding disinflation trends.
As the FOMC meeting approached, the Bitcoin price gained momentum, with investor sentiment hinging on Fed Chair Jerome Powell’s speech. The speech will shed light on the central bank’s stance regarding future interest rate decisions.
The CME FedWatch Tool indicates a 99% confidence among traders in a rate hike pause, making Powell’s comments on inflation targeting crucial.