AFMC - Fed Likely To Hold Rates Steady And Warn Of The Risk Of Delay To Cuts
2024-04-27 04:10:00 ET
Summary
- Elevated inflation and strong activity and jobs numbers have pushed market expectations for the timing of the first interest rate cut to December.
- We still see an opportunity for a September rate cut.
- Nonetheless, the Federal Reserve will remain wary and signal that if inflation stays high, so will interest rates.
By James Knightley | Padhraic Garvey, CFA | Chris Turner
Robust data forces the Fed to sound less dovish
At the March FOMC meeting, the Fed stuck with the view that the most likely path forward involved three 25bp interest rate cuts in 2024 with a further three in 2025. While they won't be updating these forecasts again until June, the fact that inflation continues to run too hot for comfort and that the economy is still growing strongly suggests a more cautious take on prospects for policy easing at next Wednesday's FOMC press conference....
Fed Likely To Hold Rates Steady And Warn Of The Risk Of Delay To Cuts