#FedMeeting #InterestRates #EconomicProjections
Fed Meeting Live Updates: Markets Await Rate Decision and Economic Projections
Today, all eyes are on the Federal Reserve as it concludes its policy meeting, with traders widely expecting interest rates to remain steady within the current range of 5.25%-5.5%. The main event for markets will be the release of the central bank's Summary of Economic Projections and its dot plot, which depicts the expected path of rates going forward. Investors will also closely follow Fed Chair Jerome Powell's press conference, scheduled for 2:30 p.m. Eastern.
Rate Cut Prospects in Check
Despite May's consumer price index reading, which showed a flat monthly change and a 3.3% annual increase, investors should temper their optimism about rate cuts. Seema Shah, chief global strategist at Principal Asset Management, warns that while the soft inflation print supports the possibility of a September rate cut, it does not reopen the door to a July cut. The Fed will need to see continued evidence of softer price pressures in the coming months before it can consider easing.
Impact on Consumer Rates
The Federal Reserve's rate-hiking campaign has significantly impacted consumers' wallets. Mortgage rates have increased, with the 30-year fixed loan reaching 7.15%, up from 4.29% before the Fed's initial rate hike in March 2022. Credit card rates have also jumped more than 400 basis points, now standing at 20.68%. On the other hand, consumers are earning higher yields on savings, with the annual percentage yield on a six-month certificate of deposit at 3.406%, up from 0.22% in March 2022.
Focus on the Dot Plot
Traders are closely watching the Fed's dot plot, which provides a quarterly report of policymakers' interest rate expectations. Earlier, the Fed indicated three rate cuts for 2024, but recent strong job reports and economic data may lead to a revised forecast showing two reductions.
Original Article: https://www.cnbc.com/2024/06/12/fed-meeting-today-live-updates-on-june-fed-rate-decision.html
Leave a Reply