Bloomberg on Nostr: Fed Officials Dial Back Rate Forecasts, Signal Just One ‘24 Cut ========== Federal ...
Fed Officials Dial Back Rate Forecasts, Signal Just One ‘24 Cut
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Federal Reserve officials voted unanimously to keep the benchmark federal funds rate in a range of 5.25% to 5.5% — a two-decade high first reached in July. They penciled in one interest rate cut this year and four more in 2025. Chair Jerome Powell says inflation has eased but is still too high and that economic activity has continued at a “solid pace.” The officials now expect to cut rates only once this year, compared to the three reductions forecast in March. They now see four cuts in 2025, more than the three previously outlined. The European Central Bank and the Bank of Canada have already begun to lower borrowing costs. Traders are still betting the Fed will most likely cut rates twice by year end, and see better-than-even odds of a first cut in September. Fed officials also published fresh forecasts for inflation, raising their projection for underlying inflation to 2.8% from 2.6% in March. They maintained their forecasts for economic growth and the unemployment rate at 2.1% and 4% respectively. The unemployment rate climbed to 4% in May. The Fed also said it would continue to shrink its balance sheet at the slower pace announced in May. Starting this month, the central bank will let its holdings of Treasury securities fall by up to $25 billion a month, down from the previous cap of $60 billion. The cap for mortgage-backed securities was left unchanged at $35 billion.
#FederalReserve #InterestRates #Inflation #EconomicGrowth #UnemploymentRate
https://www.bloomberg.com/news/articles/2024-06-12/fed-officials-dial-back-rate-forecasts-signal-just-one-24-cut
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Federal Reserve officials voted unanimously to keep the benchmark federal funds rate in a range of 5.25% to 5.5% — a two-decade high first reached in July. They penciled in one interest rate cut this year and four more in 2025. Chair Jerome Powell says inflation has eased but is still too high and that economic activity has continued at a “solid pace.” The officials now expect to cut rates only once this year, compared to the three reductions forecast in March. They now see four cuts in 2025, more than the three previously outlined. The European Central Bank and the Bank of Canada have already begun to lower borrowing costs. Traders are still betting the Fed will most likely cut rates twice by year end, and see better-than-even odds of a first cut in September. Fed officials also published fresh forecasts for inflation, raising their projection for underlying inflation to 2.8% from 2.6% in March. They maintained their forecasts for economic growth and the unemployment rate at 2.1% and 4% respectively. The unemployment rate climbed to 4% in May. The Fed also said it would continue to shrink its balance sheet at the slower pace announced in May. Starting this month, the central bank will let its holdings of Treasury securities fall by up to $25 billion a month, down from the previous cap of $60 billion. The cap for mortgage-backed securities was left unchanged at $35 billion.
#FederalReserve #InterestRates #Inflation #EconomicGrowth #UnemploymentRate
https://www.bloomberg.com/news/articles/2024-06-12/fed-officials-dial-back-rate-forecasts-signal-just-one-24-cut