NEXT FEDERAL RESERVE MEETING 2023 FULL

Inflation has continued to run hot, and core PCE inflation accelerated in the first quarter. Manufacturing is one area of weakness, where conditions continue to soften and activity contracts. labor market continues to create jobs at a robust pace and consumer spending remains resilient.

The best gauge of underlying economic growth, final sales to private domestic purchasers, rebounded +2.9%, the fastest pace since early 2021.Īpart from the GDP numbers, other higher-frequency economic data have mostly been strong as well. Most of the downside came from volatile inventories, which subtracted -2.3 percentage points from the headline number. GDP growth disappointed in headline terms, at a +1.1% quarter-over-quarter seasonally adjusted annualized rate, but the details were strong. In the six weeks since the Fed last met, economic data have been broadly positive. Economic backdrop is strong but softening When asked about the disconnect between Fed rhetoric and market pricing, Powell said that under the FOMC’s projections it will not be appropriate to cut rates this year.

NEXT FEDERAL RESERVE MEETING 2023 FULL

Nevertheless, the market continues to price in nearly three full rate cuts over the balance of this year, with zero additional hikes from current levels. Powell implied that more rate hikes could be warranted if inflation remains sticky and banking sector stresses moderate without further pain. He said that the Fed is “prepared to do more” if needed and will assess the incoming data on a meeting-by-meeting basis. In his press conference, Chair Powell leaned slightly hawkish, despite continuing to signal an end to rate hikes. It no longer “anticipates that some additional policy firming may be appropriate,” instead saying that it will “closely monitor incoming information.” The statement’s new verbiage closely mirrors the text of the June 2006 statement, which marked the last hike of that tightening cycle. The Fed used its policy statement to signal an imminent end to this tightening cycle. That takes the target range for the policy rate to 5.00% – 5.25%.

Federal Reserve continued, and likely finished, its tightening cycle by hiking rates another 25 basis points (bps). Given the mixed economic backdrop and heightened downside risks, we think the tightening cycle is over for now, with the Fed set to keep rates on hold at the next several meetings. Federal Reserve hiked rates once again at today’s policy meeting, as expected.

Next federal reserve meeting 2023