Beyond this possibility, most analysts and investors believe that, for now, it will continue maintaining it in the current range of between 5.25% and 5.5%.
The Fed raised its interest rates 11 times since March 2022 to make credit more expensive and thus contain consumption and investment, which put upward pressure on prices; and, since July, it has maintained its rates for evaluate the impact of these increases and avoid pushing the US economy into a recession.
The FOMC statement and a press conference by the president Jerome Powell are expected by investors who estimate that some signal would emerge regarding the moment in which the agency will begin with the cuts.
In this meeting, there will be no update to the Economic Projectionsso Powell’s statements become the only clue to elucidate the FED’s future actions.
The FedWatch tool used by the CME Group, one of the largest stock exchange entities in the world, reflected that in the market there is a probability of almost 98% that there will be no change in rates at tomorrow’s meeting.
The remaining 2%, who project a reduction in the rate, estimate that it would be 25 basis points, which would remain in a range of between 5% and 5.25%.
Fed: what will be the focus of this Wednesday’s meeting
The focus of the meeting will be changes in the statement that may suggest an inclination in that direction, as well as language suggesting a faster slowdown in inflation than previously observed or greater concern about the downsides of leaving rates high for too long.
Last December 13, at the last FOMC meeting, the Federal Reserve decided to keep interest rates unchanged, in a range between 5.25% and 5.5%.
On that occasion they also anticipated that in 2024 they plan to implement several cuts, until placing the cost of money at 4.6%.
Source: Ambito
