The Fed faces interest rate decision as Dow drops 400 points
by Joe Fisher · UPIJuly 29 (UPI) -- The stock market opened with the Dow falling 400 points on Wednesday ahead of the Federal Open Market Committee's latest interest rate decision.
The committee will announce its decision on Wednesday afternoon with Federal Reserve Chairman Kevin Warsh making his second address since being appointed. Economic indicators point to the Fed holding interest rates at a target range of 3.5% to 3.75%.
"My colleagues and I recognize that high inflation has been an undue burden on American households and businesses," Warsh said during a Senate Banking Committee hearing earlier this month. "The members of our committee have no tolerance for persistently elevated inflation and we share a resolute commitment to restore price stability."
The war in Iran has increased economic pressure, driven by rising fuel costs as the United States and Iran use the crucial Strait of Hormuz as a point of negotiation. The annual inflation rate rose to 4.2% in May on the back of rising gas prices.
The Federal Reserve has maintained a target goal of 2% annual inflation rate.
The average fuel price in the United States is $4.09 per gallon for regular grade gasoline on Wednesday, AAA reports.
The Federal Reserve will announce its interest rate decision at 2 p.m. EDT, followed by an address by Warsh at 2:30 p.m. EDT.