Fed Watchers Brace for Higher-for-Longer Interest Rate

With the central bank set update its interest rate forecast, economists see elevated borrowing costs lasting through 2024.

Looking beyond the Feds rate decision

The markets on Tuesday are betting that the Fed will stand pat on interest rates on Wednesday. But with oil prices surging, inflation running high, and the economy showing surprising strength, Wall Street is increasingly convinced that the central bank will leave rates at or near a two-decade high well into next year and may even raise rates again.

The higher-for-longer policy would probably deal a blow to prospective home buyers and businesses, and could undermine President Bidens message of economic growth heading into an election year.

Investors will focus on the Feds quarterly economic projections. In June, the last time the Fed released a forecast, the central bank held open the possibility of an autumn increase amid a lot of uncertainty about inflation, which is still above the Feds 2 percent target though it has begun to cool recently.