Analysts and traders parsing recent Fed speeches overwhelmingly expect the US central bank to hold rates steady for the second meeting in a row as it looks to return inflation to its long-term target of 2 per cent.
Since peaking at more than 7 per cent in June last year, inflation – as measured by the Fed's favoured yardstick – has fallen by more than half, although it remains stuck firmly above 3 per cent. "I never believed we would need a recession to bring inflation down – and today we saw again that the American economy continues to grow even as inflation has come down," he added.
"It has already added an Arctic blast to the mortgage winter, which has frozen current owners in place and locked first-time buyers out of the housing market," she said. Earlier this month, Fed Chair Jerome Powell said the current policy stance is"restrictive", suggesting monetary policy was working to put"downward pressure on economic activity and inflation".And Philadelphia Fed President Patrick Harker said he believed the Fed was"at the point where we can hold rates where they are".
While the US economy remains resilient, Fed officials have warned that the current conflict between Israel and Hamas in Gaza could affect America's economy.