The Federal Reserve maintained its benchmark interest rate at 3.5%, a level below headline inflation for years, a decision that caused turmoil on markets. Three members of the Federal Open Market Committee dissented in favor of a rate hike, a historic split since 2016 under Janet Yellen’s chairmanship. Macquarie analysts Thierry Wizman and Gareth Berry expect the dissenters to make their opposition known to Fed Chair Kevin Warsh before the next meeting in September. The decision triggered a stock decline, rising bond yields, and a 1.41% drop in the dollar, an unusual move for the world’s reserve currency. Bank of America estimates the Fed will likely need to raise rates in September to restore credibility with markets.
Source: Read the original article
