GS: Fed expected to stand pat next week

BlockBeats News, July 24th, a Morgan Stanley strategist stated in a report that recent data indicates the Federal Reserve will hold steady at the July meeting and may keep interest rates unchanged for the remainder of the year. They wrote: "The Fed is losing patience with above-target inflation. The inflation trajectory in the coming months is crucial - we expect inflation to retreat as expected - otherwise, the Fed may switch to raising rates later this year."

The money market has already priced in expectations of nearly two rate hikes by the Fed by the end of the year. However, the slowdown in inflation may prompt the Fed to keep rates unchanged this year, keeping the federal funds rate in the range of 3.50% to 3.75%. "We expect the downward trend in inflation to keep the Fed on hold this year."