Fed Interest Rates Remained Unchanged At 5.25-5.5%
Key Points:
-
The U.S. Federal Reserve maintained rates at 5.25%–5.50%, lowering the 2024 outlook from 5.1% to 4.6%.
-
Chairman Powell signaled the end of aggressive tightening, citing a faster-than-expected economic recovery.
-
Investors, expecting unchanged Fed interest rates, were validated with a 98% probability.Â
In a widely anticipated move, the U.S. Federal Reserve decided on Wednesday to maintain its benchmark fed funds rate range of 5.25%–5.50%.
Fed Interest Rates Hold Steady and Revise 2024 Outlook Downward
Simultaneously, the central bank adjusted the Fed interest rates outlook for year-end 2024, revising them from 5.1% to 4.6%. This decision reflects a shift in the Federal Reserve‘s stance, signaling the potential conclusion of the historic tightening of U.S. monetary policy implemented over the last two years.
The central bank’s new economic projections indicate an end to the tightening phase, with expectations of lower borrowing costs in 2024. Chairman Jerome Powell, in a press conference, acknowledged the faster-than-expected progress in the U.S. economic recovery.
Powell emphasized that the Federal Open Market Committee (FOMC) participants’ forecasts for economic growth in the current year have been revised upward since the September Summary of Economic Projections.
Crucially, the policy statement explicitly noted the easing of inflation over the past year, suggesting a cautious approach. Powell stated that the Federal Reserve would carefully monitor the economy, hinting that further rate hikes might not be necessary—a departure from the previously aggressive tightening bias.
Investors, in line with expectations, received the news of unchanged Fed interest rates. The CME FedWatch tool indicated a 98% probability of this outcome based on the prices of Fed funds futures contracts.
Moreover, the latest projections reveal a more balanced outlook for the Fed’s dual mandate of inflation and employment risks. This shift in sentiment contributed to Bitcoin‘s rise of over 4% in the past 24 hours, reaching $42,700 at 3:00 p.m. ET, following a brief pullback from its early December yearly high of over $44,400.
DISCLAIMER:Â The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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Fed Interest Rates Remained Unchanged At 5.25-5.5%
Key Points:
-
The U.S. Federal Reserve maintained rates at 5.25%–5.50%, lowering the 2024 outlook from 5.1% to 4.6%.
-
Chairman Powell signaled the end of aggressive tightening, citing a faster-than-expected economic recovery.
-
Investors, expecting unchanged Fed interest rates, were validated with a 98% probability.Â
In a widely anticipated move, the U.S. Federal Reserve decided on Wednesday to maintain its benchmark fed funds rate range of 5.25%–5.50%.
Fed Interest Rates Hold Steady and Revise 2024 Outlook Downward
Simultaneously, the central bank adjusted the Fed interest rates outlook for year-end 2024, revising them from 5.1% to 4.6%. This decision reflects a shift in the Federal Reserve‘s stance, signaling the potential conclusion of the historic tightening of U.S. monetary policy implemented over the last two years.
The central bank’s new economic projections indicate an end to the tightening phase, with expectations of lower borrowing costs in 2024. Chairman Jerome Powell, in a press conference, acknowledged the faster-than-expected progress in the U.S. economic recovery.
Powell emphasized that the Federal Open Market Committee (FOMC) participants’ forecasts for economic growth in the current year have been revised upward since the September Summary of Economic Projections.
Crucially, the policy statement explicitly noted the easing of inflation over the past year, suggesting a cautious approach. Powell stated that the Federal Reserve would carefully monitor the economy, hinting that further rate hikes might not be necessary—a departure from the previously aggressive tightening bias.
Investors, in line with expectations, received the news of unchanged Fed interest rates. The CME FedWatch tool indicated a 98% probability of this outcome based on the prices of Fed funds futures contracts.
Moreover, the latest projections reveal a more balanced outlook for the Fed’s dual mandate of inflation and employment risks. This shift in sentiment contributed to Bitcoin‘s rise of over 4% in the past 24 hours, reaching $42,700 at 3:00 p.m. ET, following a brief pullback from its early December yearly high of over $44,400.
DISCLAIMER:Â The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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