Fed meeting tomorrow: what to expect

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on Mar 19, 2024
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  • Today and tomorrow, the FOMC meet for the Federal Reserve's March 2024 meeting.
  • It promises to be an important one for rate cuts going forward.
  • Here's what to expect - and what not to expect.

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The eyes of the finance world are on the United States, as the Fed meets today and tomorrow to discuss decisions on interest rates at their policy meeting on March 19th and 20th.

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This week’s FOMC meeting, followed by a press conference by chair Jerome Powell tomorrow afternoon, promises to be especially significant.

For the first time since December 2023, the Fed will give quarterly projections for the upcoming months, and markets will closely compare them to the optimistic projections given at the end of last year, which hinted at three or more rate cuts coming in 2024.

What to expect from Fed meeting this week

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The latest inflation data out of the US was the Producer Price Index (PPI) February numbers from the U.S. Bureau of Labor Statistics.

These showed that PPI unexpectedly doubled last month, from 0.3% in January to 0.6% in February, in a move that will likely see sellers and producers passing on these higher costs to consumers (which will affect the United States’ CPI).

Given this most recent data, we expect a far more cautious, hawkish view from the Fed tomorrow than the one given three months ago.

The ‘higher for longer’ message is likely to get touted again, as the Fed keeps interest rates steady and maybe even revise their previous forecast of three 2024 rate cuts downward.

Perhaps even the number of rate cuts to expect – or not to expect – in 2025 will be revealed.

What not to expect from Fed decision this week

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In two words? Rate cuts. Yet.

The market seems to have fully priced in the likelihood that the earliest we’ll see any rate cuts from the Fed is June.

If the Fed were to lower interest rates tomorrow, it would likely be a big surprise to the market and would go against all the currently available inflation data, which is showing that it is quite sticky still.

That being said, don’t expect a rate hike, either.

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Federal Reserve System USA Central Banks Economic Inflation Interest Rate North America