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Fed holds rates steady, indicates three cuts coming in 2024

With the inflation rate easing and the economy holding in, policymakers on the Federal Open Market Committee voted unanimously to keep the benchmark overnight borrowing rate in a targeted range between 5.25%-5.5%.

Along with the decision to stay on hold, committee members penciled in at least three rate cuts in 2024, assuming quarter percentage point increments. That’s less than market pricing of four, but more aggressive than what officials had previously indicated.
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Fed interest rate decision December 2023: Fed holds rates steady, indicates 3 cuts coming in 2024
 
I’m not comfortable with their plans. The evidence continues to point to at least one more rate HIKE needed if they are going for the soft landing.

Holding here, and saying they’ll cut next year, is too optimistic for my tastes. We’ve had a few months now to digest the hikes already put in, but I think that digestion is just about over, and the market needs one more 1/4 to 1/2 point to bring inflation down.

We may have a couple of days here seeing a drift upwards, but dang- it’s gotta be close to at least one down cycle.


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Fed’s John Williams says the central bank isn’t ‘really talking about rate cuts right now’
New York Federal Reserve President John Williams said Friday rate cuts are not a topic of discussion at the moment for the central bank.

“We aren’t really talking about rate cuts right now,” he said on CNBC’s “Squawk Box.” “We’re very focused on the question in front of us, which as chair Powell said... is, have we gotten monetary policy to sufficiently restrictive stance in order to ensure the inflation comes back down to 2%? That’s the question in front of us.”
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Fed’s John Williams says the central bank isn'''t '''really talking about rate cuts right now'''
 
Fed’s Goolsbee says he was ‘confused’ by last week’s market reaction

The Fed voted last week to hold rates steady once again, and its updated projections showed an expectation of three rate cuts in 2024.

That caused a rally in stocks and bonds, with the Dow Jones Industrial Average jumping to a record.

However, Chicago Fed President Austan Goolsbee suggested on CNBC’s “Squawk Box” on Monday that the reaction wasn’t totally rational given what the central bank actually said.
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Fed'''s Goolsbee says he was '''confused''' by last week'''s market reaction
 
Wait, what? I thought we were getting rate cuts? The market has priced them in already. :nuts:


Fed’s Barkin sees likely soft landing ahead but notes rate hikes still a possibility

Richmond Federal Reserve President Thomas Barkin on Wednesday expressed confidence that the economy is on its way to a soft landing.

He compared the Fed’s job to a pilot bringing an airplane in for a landing, and noted four risks ahead.

Despite noting progress on inflation, Barkin said, “the potential for additional rate hikes remains on the table.”
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Fed'''s Barkin sees likely soft landing ahead but notes rate hikes still a possibility
 
Powell insists the Fed will move carefully on rate cuts, with probably fewer than the market expects

Federal Reserve Chair Jerome Powell vowed in a “60 Minutes” interview aired Sunday that the central bank will proceed carefully with interest rate cuts this year.

“We just want some more confidence before we take that very important step of beginning to cut interest rates,” he said.

Powell warned that the monetary policy tightening would cause “some pain.” However, “it really hasn’t happened,” he added.
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Powell insists the Fed will move carefully on rate cuts, with probably fewer than the market expects
 
I wish Powell would stop communicating. No matter what he says the market turns red.
 
Here’s everything to expect from the Federal Reserve’s policy meeting Wednesday

The Fed has a lot to do at its meeting this week, but ultimately may not end up doing a whole lot in terms of changing the outlook for monetary policy.

This meeting likely will be all about the Federal Open Market Committee’s “dot plot” of individual member’s interest rate expectations.

Officials also will release their quarterly update on the economy, specifically for gross domestic product, inflation and the unemployment rate.
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Here'''s everything to expect from the Federal Reserve'''s policy meeting Wednesday
 
Jerome Powell: "Inflation is still too high. Further progress in bringing it down is not assured and the path forward is uncertain."

Stocks soaring on the news. :laugh:
 
Funny how market rallies on rate cut hopes, but if the market is going up, the fed has no reason to cut rates.
 
Fed’s Kashkari says it’s ‘reasonable’ to predict a December rate cut

“We’re in a very good position right now to take our time, get more inflation data, get more data on the economy, on the labor market, before we have to make any decisions,” Kashkari said. “We’re in a strong position, but if you just said there’s going to be one cut, which is what the median indicated, that would likely be toward the end of the year.”
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Fed'''s Kashkari says it'''s '''reasonable''' to predict a December rate cut
 
They love their power...


Fed's Bowman: need steady policy rate 'for some time' to beat inflation

U.S. Federal Reserve Governor Michelle Bowman on Tuesday reiterated her view that holding the policy rate steady "for some time" will probably be enough to bring inflation under control, but also repeated her willingness to raise borrowing costs if needed.
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Fed's Bowman: need steady policy rate 'for some time' to beat inflation
 
Renewed Hope on Inflation but More Confidence Needed

By Raphael Bostic - President and Chief Executive OfficerBy Raphael Bostic, President and Chief Executive Officer

Despite those hopeful recent glimmers, the stubbornness of inflation early this year indicates that progress toward the FOMC's 2 percent objective will likely come more slowly than I and others had previously hoped. That said, I have long maintained that the path to 2 percent would take considerable time; it just might take a little longer than one might have expected given how fast inflation was falling as we exited 2023.

If conditions unfold as I expect—orderly slowing in the labor market and in economic activity—then inflation should fall all the way to 2 percent in 2025 or perhaps a bit later.
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Message from the President: Renewed Hope on Inflation but More Confidence Needed - June 27, 2024 - Federal Reserve Bank of Atlanta
 
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