The Federal Open Market Committee (FOMC) is set to announce its latest interest rate decision on Wednesday, July 29, following a two-day meeting that began Tuesday.
The central bank’s policy move is expected to be closely scrutinized by markets, which remain on edge amid persistent fears that the Fed may opt for a rate hike rather than a cut or hold.
Traders are positioning for volatility as the committee weighs inflation data against economic growth indicators.
The prospect of a surprise tightening has kept US Treasury yields elevated, with the 10-year yield trading near recent highs as investors price in a hawkish outcome.
Equity markets have also shown sensitivity to the risk, with rate-sensitive sectors under pressure in the days leading up to the announcement.
The current policy stance reflects a delicate balance for the Fed, which has signaled a cautious approach to monetary easing.