Wells Fargo: Fed Rate Seen on Hold, but Powell Communication Style to Bring More Market Volatility

July 29th, Paul Christopher, Global Investment Strategist at Wells Fargo Investment Institute, said he expects the Fed's interest rate to remain unchanged. The June easing of inflation provided policymakers with an opportunity to extend the rate hike pause and await more data.

Luis Alvarado, Co-Head of Global Fixed Income Strategy at the Institute, pointed out that Powell has made it clear that "bringing inflation back to 2% remains the Fed's top priority, and policymakers have almost zero tolerance for price pressures. We believe he does indeed trust that the Fed can achieve this goal."

Alvarado stated that the biggest change Powell may bring is in communication, especially in forward guidance. Investors should expect increased policy flexibility, and inter-meeting market volatility may be higher. For Powell, the ability to adapt and react flexibly to changing circumstances remains crucial. (FXStreet)