Perspective on Fed interest rate decision by Ashish Rajodiya, Head - Commodities, PL Capital
Below the Perspective on Fed interest rate decision by Ashish Rajodiya, Head - Commodities, PL Capital
The Federal Reserve raised interest rates by 25 basis points to 3.75-4.00% on Wednesday, its first hike since 2023, with Chair Kevin Warsh saying "the plain fact is that inflation is too high and has been for too long" and framing the move as securing a timelier return to the central bank's 2% goal. Most policymakers now see the federal funds rate at 4.1% by the end of 2026, implying one further 25 basis point hike this year, with the median holding flat through 2027 — a path of one more move followed by an extended pause rather than a sustained tightening cycle. Warsh pushed back on the idea that lowering inflation requires economic pain, saying he does not believe the Fed needs "to do harm to the labor markets to achieve our objective," but gave no signal on timing. Attention now shifts to the October meeting and the inflation prints in between, leaving rate-sensitive assets such as gold and silver exposed to sharper swings around the data.
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