The market assumes that there will be no movement in interest rates and that they will remain between 5.25 and 5.5%, but the organization is at the crossroads between good economic data and market problems.
The US Federal Reserve (Fed) faces an important question: is it time to put an end to interest rate hikes?
The consensus among investors appears to be that the central bank will decide at its meeting today to keep interest rates at current levels, between 5.25 and 5.5%, according to the CME group’s FedWatch tool.
For now, “the downward trend (in inflation) is intact and the Fed should be able to take a step back from considering additional increases, and perhaps consider some pre-emptive cuts as early as late spring/summer 2024,” according to Loomis Sayles’ analysis. a specialist manager at Natixis Investment Managers.
The group believes the Federal Reserve “is backtracking somewhat on the appreciation of longer-dated U.S. Treasuries and appears to have become more cautious about excessive tightening.”
More cautious is Cristina Gavín Moreno, head of fixed income at Ibercaja Gestión, who assured in a commentary ahead of the two-day Fed meeting that “the change in the bias in the Federal Reserve’s monetary policy is still far away and not “likely to occur before see an interest rate cut at the end of 2024.”
Since the last monetary policy meeting in September, which also saw central bankers leave interest rates unchanged, incoming data has shown stronger-than-expected employment growth, stronger-than-expected economic growth and only a slow moderation in inflation, which stood at 3.4% in According to the Fed’s favorite indicator, September remains well above target.
Source: EITB
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
