Pimco Economist: Fed to Hold Rates Steady in September

Tiffany Wilding, an economist at Pimco, commented on the U.S. Federal Reserve's monetary policy following the latest consumer price data. Speaking on Bloomberg Surveillance, Wilding stated that she expects the Fed to keep interest rates unchanged at current levels in September. This forecast comes at a time when inflation data suggests the Fed may maintain its hawkish stance. Wilding noted that although inflation remains above target, the likelihood of a rate hike is low given current data. The Pimco economist argued that the central bank will continue its data-dependent approach and adopt a wait-and-see policy at the September meeting. This could weaken market expectations for rate cuts. Despite signs of slowing inflation in the U.S., Fed officials appear to maintain a cautious tone. Wilding highlighted the persistence of inflation, predicting that the Fed will wait for more evidence before cutting rates, and therefore rates will remain steady in September. These remarks could shape investors' expectations regarding the Fed's future policy. Pimco's commentary comes amid ongoing discussions about a soft landing for the U.S. economy. While the Fed's rate decisions directly impact global markets, Wilding's assessment reinforces the perception that the central bank will pause its tightening steps in the near term. However, a potential surprise in inflation data could alter these expectations. This is not investment advice.