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The Federal Reserve (Fed) opted to maintain its key policy rate, the federal funds rate, within the range of 5.25% to 5.5% this week. Nonetheless, the Fed conveyed a consensus view that another rate hike is possible later in the year, along with its commitment to keeping rates at their current level until inflation subsides closer to its 2% target, endorsing a ‘higher-for-longer’ strategy.

Economic data released this week provided the Federal Reserve with key information to digest before their upcoming meeting on September 20th. The August Consumer Price Index (CPI) came in slightly higher than expected, with the headline CPI up 0.6% month-over-month and 3.7% year-over-year, accelerating from 3.2% year-over-year in July.