The European Central Bank seems set to raise its benchmark interest rate by another 25 bps to 3.5% on Thursday. With the jobs market still strong and wage growth trending above headline CPI, the Fed may have doubts about holding rates this month. Official briefings highlight a divergence of views on how the Fed might move forward, with a slight bias towards keeping rates on hold in June and raising them in July. This is because markets have repriced interest rate cuts, pushing them back from the end of this year to next year, due to resilience in the labour market and core inflation. The decision brought little in the way of surprises as the Fed signalled that it could soon call a halt to its monetary tightening campaign.ĭespite signs of a possible pause, US 2-year Treasury rates have increased over the past month. On 3 May the Federal Reserve raised interest rates by 25 basis points (bps), lifting the federal funds rate to a new target range of 5% to 5.25%, its highest level for 16 years.
Federal Reserve interest rate decision – Wednesday Our top three economic and company events in order of importance are: 1. On the earnings front, retailers Kroger and Tesco are set to report their latest results. In a busy week for rate decisions, the European Central Bank is holding its own rate-setting meeting on Thursday, while it’s the Bank of Japan’s turn on Friday. The latest US inflation figures come out on Tuesday, a day before the Federal Reserve announces whether it will raise interest rates for the 11th time since March 2022.
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