At its September meeting, the U.S. Federal Reserve (Fed), as expected, left its federal funds target rate unchanged, at 5.25%–5.50%. The outlook remains hawkish, though, and the interest rate market currently is pricing a 30% probability of an additional 25-basis-point (bp; 100 bps equal 1.00%) hike at the Fed’s November meeting. Despite core inflation’s continued slowing, its current 4.3% year-over-year pace seems too high to us to expect interest rate cuts anytime soon.
We explain key drivers of Fitch’s August 1 downgrade of the U.S.’s long-term rating and the potential implications on the market, securities, and clients.
The Federal Open Market Committee just decided to increase the federal funds target rate by 0.25%, resulting in a new target of 5.25% to 5.50%.
The Federal Open Market Committee decided to leave the federal funds target rate unchanged, at 5.00% to 5.25%. Inflation fighting remains the top priority, which realistically will likely require some form of economic weakening.
As expected, the Federal Open Market Committee (FOMC) decided to hike its key interest rate, the federal funds rate, by 25 basis points (bps; 100 bps equal 1.00%), to a range of 5.00% to 5.25%. Despite the banking sector’s ongoing wobbles—most recently, First Republic Bank’s takeover by JP Morgan over the past weekend—the FOMC sees fighting inflation as its highest priority.
The Federal Open Market Committee hiked rates by 25 basis points (bps) and kept its quantitative tightening plans in place. It did acknowledge that financial conditions have tightened and progress has been made on inflation.
The Federal Open Market Committee (FOMC) meets next week on Tuesday and Wednesday, March 21‒22. A week ago, investors were fretting over whether the FOMC might speed up its rate hikes. Now, some are saying the FOMC might cut rates. What’s changed in such a short time? Things are breaking, that’s what.
We had some pretty wild data releases over the past few weeks. From November through December, retail sales declined each month, and so did manufacturing activity. Then, we had a bit of a recovery in January. Nonfarm payroll growth was astonishingly high throughout that whole three-month period. How can investors make sense out of the mixed macroeconomic messages?
The Federal Open Market Committee (FOMC) hiked the federal funds rate by 25 basis points (bps; 100 bps equal 1.00%).
For some Federal Open Market Committee (FOMC) meetings, the result seems obvious ahead of time to just about everyone. This was one of them. When the result is obvious, the market shouldn’t react much because there’s little room for a surprise to push prices around. But this time, the market did react. Why? It’s simple: The FOMC is splintering into factions, and that makes the outcomes from future meetings much less obvious.
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