A few economists are of the view that even though easing inflation and outlook might prompt the central bank to cut rates, a pause in the August policy cannot be ruled out after the 50 bps rate cut in the June policy.
Howard Marks at Global Wealth Summit 2025: The US economy doesn't need artificially low borrowing costs to function well and today's interest rates are not a burden on the economic growth.
The US inflation has eased of late, but is still too high for comfort for the US Federal Reserve to start cutting policy interest rates. Jerome Powell made it clear that the rates won't be cut until there's confidence that the inflation is falling towards 2%.
The US Federal Reserve's latest dot plot projects only one quarter-point rate cut by the end of 2024, down from earlier forecasts of multiple cuts.
This ascent was driven by recovering investor sentiment from the pandemic, rising corporate profits, cooling inflation, and increased speculation about interest rate cuts.
That put a damper on Wall Street. The Dow Jones Industrial Average and the S&P 500 were little changed by 1549 GMT, and the Nasdaq Composite lost 0.17%.
Most Asian and European bourses closed in the red.
A slowdown in growth later this year is expected, Fed Chair Jerome Powell said
While markets have pulled back from their lows, the question now is whether the worst is behind us.
"Obviously the election seems to have shifted expectations" on fiscal policy, Lacker told reporters, adding it was too soon to know if Washington would crimp the central bank's independence following Republican Donald Trump's victory in the November 8 presidential election.
Speaking in the wake of the US central bank's decision last week to hold rates steady, 10 Fed officials fanned out for appearances this week in a profusion of "Fedspeak" that markets and the public are trying to digest.
Lacker will not have a vote on policy at the Fed's September 20-21 meeting but he will participate in discussions, and his comments point to an ongoing debate within the US central bank on when to tighten policy.
Hopes for an agreement between Russia, Saudi Arabia and other crude giants to at least freeze output sent both main contracts racing above USD 40 earlier this month, helped by a dive in the strength of the dollar.
The Nikkei futures' Friday close suggests Japan's Nikkei is likely to fall more than two percent, below its September trough to one-year lows while Australian shares on Monday fell 1.7 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dropped 0.7 percent in early trade. Japan's Nikkei shed 3.3 percent, as downbeat domestic data added to the gloom.
Spot gold was little changed at USD 1,077.60 an ounce by 0047 GMT, after gaining 2.5 percent in the last two sessions
By contrast, Taiwan's central bank cut interest rates for the second time this year and said it would keep monetary policy loose to shore up growth in the island's trade-dependent economy as the global demand outlook worsened.
The Fed hiked interest rates for the first time in nearly a decade on Wednesday, signaling faith that the US economy had largely overcome the wounds of the 2007-2009 financial crisis.
The Federal Reserve's 25-basis-point increase was almost a decade in the making and easily one of the most telegraphed in history. So there was some relief that, after months of waiting and several false starts, the move was finally done and dusted.
With a hike seen as a mostly done deal after more than a year of anticipation, investor focus is fixed on how the Fed might opt to pace its tightening cycle next year. The central bank has hinted that it intends to hike rates gradually.
Markets were also focused on whether the People's Bank of China (PBOC) would continue to guide its currency lower, with traders wary about the central bank's intentions after it set the yuan/dollar official midpoint at 4-1/2-year lows in recent session.
Spot gold was up 0.1 percent at USD 1,120.20 an ounce at 1100 GMT, while US gold futures for December delivery were down USD 1.90 an ounce at USD 1,119.50.
Gold struggled to pull away from a 5-1/2-year low on Thursday after more upbeat US economic data bolstered prospects that the Federal Reserve could lift interest rates as soon as next month
The 19-member currency union has been a millstone around the global economy's neck ever since the financial crisis spawned a sovereign debt crisis particular to Europe.
Spot gold gained 0.6 percent to USD 1,174.26 an ounce by 0041 GMT, after earlier climbing to USD 1,175.05, its highest since March 9. The metal gained 1.6 percent on Wednesday, its biggest one-day jump since Jan. 30.