Interest rate hike expected as Federal Reserve officials gather in Washington this week

Investors and economists are bracing for another interest rate hike this week as central bank officials gather in Washington for their July meeting. Their two-day gathering July 26 and 27 comes as the Federal Reserve works to combat soaring inflation that has left families across the country struggling to make ends meet. 

Economists expect Fed officials will raise the federal funds rate by 75 basis points – bringing the rate to between 2.25% and 2.50%, which is where it was at its most recent high in summer 2019 before the coronavirus pandemic. 

This will mark the fourth interest rate hike of the year as consumer prices have risen at the fastest pace in more than 40 years. Five months ago, the federal funds rate was near zero percent. At its June meeting, the Federal Open Market Committee raised the federal funds rate by a more aggressive 75 basis points for the first time in nearly 30 years following an increase of 25 basis points and 50 basis points at the March and May meetings, respectively.