Recent U.S. inflation data exceeded expectations, reinforcing the belief that the U.S. Federal Reserve will not cut interest rates at its scheduled meeting at the end of this month. As inflation has not yet reached the targeted level of 2%, keeping rates high or even increasing them may be the optimal choice to stabilize the economy.
Potential Impacts of Federal Decisions:
- "Higher for Longer" Policy: The Federal Reserve is expected to adopt a policy of keeping interest rates high for an extended period to ensure control over inflation and avoid a return to high inflation levels as seen in the 1970s.
- Next Meeting in September: The upcoming meeting of the Federal Reserve will be crucial in determining future monetary policy and its impact on the U.S. economy.
Financial markets react to data:
- Stocks and Currencies: Financial markets are influenced by Federal Reserve decisions, as changes in interest rates can lead to volatility in markets and impacts on investments.
- Institutional Economics: Institutional economics is credited with making decisions based on data and economic indicators rather than political influences, thereby enhancing stability and confidence in financial markets.#التضخم