The Fed has held its policy rate in the 5.25% to 5.50% range for more than a year now to slow economic growth and keep downward pressure on inflation.
Weak job-market data at the start of this month fueled concern among investors that the Fed had left policy restrictive for too long, and that it would need to chop rates an aggressive half a percentage point in September, if not before, to counter a looming recession.
Recent data, including a strong retail sales report earlier Thursday, has been more encouraging, suggesting inflation is indeed receding but the economy is far from collapsing. Investors now expect the Fed to start reducing borrowing costs by a more-usual quarter of a percentage point next month.
Source: Economy - investing.com
