Markets are shifting attention to the September meeting of the Federal Reserve after the US central bank left its interest rates unchanged on Wednesday, with analysts predicting another cut is possible this year.The Fed's decision to leave interest rates unchanged at 3.50-3.75% this week as widely expected has done little to dispel expectations that borrowing costs could rise once more this year, say analysts, noting that persistent inflation, geopolitical risks and higher energy prices continue to cloud the policy outlook.
Investors are monitoring upcoming US inflation data, developments in the Middle East and major central bank meetings, while financial markets remain sensitive to changes in interest rate expectations.
Three Fed officials dissented in favour of a 25-basis-point rate hike, marking the largest hawkish dissent since September 2016. The dissenting officials argued that inflationary pressures remain too strong after prices have stayed above the Fed's 2% target for more than five years.
They also cited higher US import tariffs under President Donald Trump and rising energy costs linked to tensions with Iran as additional upside risks to inflation.
Piyasak Manason, head of economic research at InnovestX Securities, said the market's attention has shifted to the Fed's September meeting.
