The market generally expects the Federal Reserve to keep the federal funds rate unchanged, but Paolo Zanghieri, Senior Economist at Generali Investments, stated in a report that the more important issue will be the message conveyed by the Fed. With persistent inflation, rising oil prices, and internal divisions within the Fed leaving the door open for further tightening later this year, policymakers are expected to maintain or even reinforce a hawkish tone. This aligns with Generali’s broader f

The market generally expects the Federal Reserve to keep the federal funds rate unchanged, but Generali Investments Senior Economist Paolo Zanghieri stated in a report that the more important matter will be the messaging from the Federal Reserve. It is expected that with persistent inflation, rising oil prices, and internal disagreements at the Federal Reserve opening the door to further tightening policies later this year, policymakers will maintain or even reinforce a tightening stance. This aligns with Generali's broader expectation that, although overall inflation has eased, sticky inflation will prompt the central bank to remain cautious. The market will pay less attention to the rate decision itself and focus more on any signals regarding the September meeting and the balance between inflation risks and economic growth.