It is unlikely the U.S. Federal Reserve (Fed) will raise interest rates today after its two-day July meeting, experts told Anadolu Agency (AA) yesterday. "I don't expect any change in the monetary policy at the Fed's July meeting," said Mark Zandi, chief economist at Moody's Analytics. "The Fed remains cautious about still below-target inflation, volatility in financial markets and potential fallout from geopolitical events such as Brexit," he added.

For a rate hike, the Fed has adopted a cautious stance against a number of factors throughout the first half of this year such as potential risks in foreign economies, the fragility in global markets and the U.K. voting to leave the EU.

Ryan Sweet, director at Moody's Analytics, also pointed to the Brexit and said the Fed wants solid evidence that risks of a spillover effect to the U.S. economy from the event are small.

Expecting the Fed's July meeting to be uneventful, he said: "The Fed isn't convinced that inflation is moving toward their inflation target as quickly as they wanted." The Fed has a 2 percent inflation target, whereas this number stood at 1 percent through the 12 months ending in June 2016. Meanwhile, global financial markets and positive sentiment in the U.S. stock market are being watched closely by the Fed.

Wall Street has been breaking records for the last two weeks, finishing last Friday with a fourth straight weekly gain, and the Fed will not want to disturb this bullish atmosphere.

"I strongly believe that the Fed is much influenced by global markets," said Matthew Carbray, managing partner at independent wealth management firm Ridgeline Financial Partners. "I don't think [a rate hike] will happen. ... The market is the driving force behind these decisions. As much as we have experienced very strong market conditions, the Fed also understands that this is a very cautious environment that we are in," he explained.

What to expect today

It is clear the Fed will not raise interest rates at its July meeting, but the question remains whether the bank will give any signals about rate hikes in the remainder of the year. "The Fed is going to have to try and pull off one or two rate hikes this year without causing the dollar to strengthen significantly, which would hurt growth," Sweet said. "It may delay signaling a move until it is clear that a rate hike is imminent. Therefore, we don't believe they will signal a hike," he added.

However, Carbray said the Fed "has not been very credible," especially given that there have been improvements in employment, growth and inflation figures. "I think the forward indication will be strong [about a rate hike this year]. ... Enough has gone by to see that there is real growth out there, and hopefully they will give the strongest indication, more than they ever had," he explained. Carbray said he thinks there will be one 0.25 basis point rate hike in either September or December, adding the likelihood is September rather than the end of 2016.

However, Sweet said he believes there will be no changes in the Fed's forward guidance on Wednesday that would hint at a September rate hike, and added he thinks the odds of a September rate hike are 25 percent and a December hike 60 percent.

Zandi said the Fed "is happy with current market expectations for a December rate hike," and noted that he thinks there is a 30 percent probability of a rate hike at the September meeting and a 65 percent probability at the December meeting. The Fed had increased its benchmark interest rate by 0.25 of a basis point last December - its first rate hike in almost a decade. After the July meeting, its next meeting on rate decisions will be on Sept. 21.