Federal Reserve officials, lacking a strong consensus for action a week before their next policy meeting, are leaning toward waiting until late in the year before raising short-term interest rates.
It is a close call. But with inflation holding below the Fed’s 2% target and the unemployment rate little changed in recent months, senior officials feel little sense of urgency about moving and an inclination toward delay, according to their public comments and recent interviews.
The Fed’s decision has become the subject of intense market speculation in recent days. Interest rates can affect stock valuations, the cost of financing a home and whether companies will take on big new projects, making the central bank the perpetual center of market attention. Wall Street is especially attuned to when the Fed will move after it has decided to hold rates steady so far this year.
For several weeks, investors saw a low probability of a rate increase in September, but they became more focused on the possibility of a move in recent days. Stocks tumbled on Friday, when traders interpreted comments from regional Fed bank officials as signals from the central bank that the likelihood of a rate move was rising.
On Monday, with those worries easing, the Dow Jones Industrial Average finished the day up 239.62 points, or 1.32%, at 18325.07, reversing some of Friday’s losses.