US Fed Meeting 2024 Live: Federal Reserve keeps interest rates steady at 5.25-5.50% as inflation falls

“Recent indicators suggest that economic activity has been expanding at a solid pace,” the today’s statement reads.

“Job gains have moderated since early last year but remain strong, and the unemployment rate has remained low,” it continues, before adding the line likely to dominate news coverage: “Inflation has eased over the past year but remains elevated.” Click here

It’s still unclear if the Federal Reserve will move to cut rates in March, said Ian Lyngen, head of U.S. rates at BMO, after Fed’s Wednesday’s statement.

“While this doesn’t take a March cut off the table completely, it also isn’t an endorsement of a move on March 20th,” he said in a note.

Fed meet live: The three major US stock indexes were already weighed down by weakness in tech and tech-adjacent megacap stocks the day after disappointing Alphabet results. All three turned lower ahead of Fed Chair Jerome Powell’s Q&A session, expected to begin shortly. At 02:10 p.m. (EST), the Dow Jones Industrial Average fell 61.72 points, or 0.16 per cent , to 38,405.59, the S&P 500 lost 46.13 points, or 0.94 per cent, to 4,878.84 and the Nasdaq Composite lost 222.88 points, or 1.44 per cent, to 15,287.02.

Fed meet live: The Federal Reserve held interest rates steady for the fourth straight meeting and signaled its openness to cutting them, though not necessarily right away.

In a statement issued after their two-day meeting, Fed officials dropped their previous assertion that a rate hike was possible and instead adopted a more even-handed assessment of the future policy path.

“The Committee judges that the risks to achieving its employment and inflation goals are moving into better balance,” the central bank’s policy-making Federal Open Market Committee said Wednesday.

“In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.”

But in a sign that officials are not in a rush to reduce rates, the FOMC also said it “does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward two per cent.”

The dollar index pared losses Wednesday after the Federal Reserve left interest rates unchanged and dropped a longstanding reference to possible further hikes in borrowing costs. The dollar index was last flat on the day at 103.39. The euro was last down 0.16 per cent on the day at $1.08275. The greenback pared losses against the yen and was last down 0.66 per cent on the day at 146.72 yen.

According to David Kelly, chief global strategist at JPMorgan Asset Management, the Federal Reserve has laid the groundwork for rate reductions beginning in June.

“It sounds to me like June, September, December is what they are thinking — three rate cuts this year —provided the economy keeps growing,” Kelly said in an interview with CNBC following the release of the Federal Reserve’s statement.

“There doesn’t seem to be, at the moment, a sign that the U.S. economy is going to keel over and fall into recession any time soon,” he added.

Fed meet live: Indicating that they are not yet prepared to lower interest rates, policymakers believe that a move won’t be appropriate until they have greater confidence that “inflation is moving sustainably toward two percent” at their next meeting in March.

With a maximum of $60 billion in Treasury securities and $35 billion in mortgage-backed securities sliding off the balance sheet each month, the Fed continues its quantitative tightening program. The statement makes no mention of any changes to the program.

Fed meet live: The Fed has a dual mandate to keep both inflation and the unemployment rate low, and has been heavily focused on bringing high inflation back down towards its long-term target of two per cent. The US central bank confirmed in a statement that it was holding its benchmark lending rate steady at a 23-year high between 5.25 per cent and 5.50 per cent.

Fed meet live: Central bank policymakers said that they aren’t yet ready to start cutting rates, according to their two-day meeting statement.

“The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent,” the statement said.

Few meet live: The Federal Reserve has left interest rates unchanged in January. It’s the fourth consecutive time that the central bank has decided to keep steady on rate policy.

The fed funds rate remains at a range of 5.25% to 5.5% as the US central bank confirmed said it is unlikely to start cutting rates without “greater confidence” that inflation is moving “sustainably” towards its long-term two per cent target. The central bank added that the “risks to achieving its employment and inflation goals are moving into better balance.”

Fed meet live: A recent study conducted by Wolters Kluwer Blue Chip Economic Indicators revealed that forecasters anticipate 1.6% growth in the GDP this year.

That kind of growth likely means the Fed will have achieved a coveted “soft landing” by restraining the economy enough to tamp down inflation without triggering a recession.

Fed meet live: The Federal Open Market Committee will next meet on March 19 and 20.

Here are all of the upcoming Fed meetings planned for 2024

March 19-20

April 30- May 1

June 11-12

July 30-31

Sept. 17-18

Nov. 6-7

Dec. 17-18

Fed meet live: Experts predict that credit card interest rates won’t drop much in the upcoming months because banks won’t want to lower them.

There is a record $1.08 trillion in credit card debt, and the rate of delinquency has been increasing. Delinquencies might turn into charge-offs, which banks take as losses, if the economy contracts enough.

Fed meet live: Even though Microsoft exceeded expectations in terms of revenue and profit, the company saw a 1.5% decline. Wedbush Securities analyst Dan Ives went on to refer to the quarterly report as “a masterpiece that should be hung in the Louvre.”

Another company in the group known as the “Magnificent Seven,” Tesla, fell 1%. Just one day prior, a Delaware judge declared that Tesla’s CEO, Elon Musk, was not entitled to the historic remuneration package worth over $55 billion that the company had given him.

Fed meet live: Wednesday saw the tech-heavy Nasdaq fall to levels not seen in more than a week as Alphabet’s predictions for growing AI expenses hurt most megacap and chip firms ahead of an important Federal Reserve policy announcement that was anticipated later in the day.

The parent company of Google fell 6.1%, causing the S&P 500 communication services sector to drop by 3%. The company’s decline was caused by lower-than-expected holiday-season advertising sales and higher-than-expected spending on artificial intelligence, Reuters reported.

Microsoft’s positive quarterly results were overshadowed by a 1.3% decline in shares as it predicted increased costs for the development of new AI features.

Fed meet live: The yield on the benchmark 10-year Treasury note is slightly over 4%, significantly below its peak of nearly 5% last autumn, and the stock market is almost at a record high. The 10-year yield is usually followed by average long-term mortgage rates, which have decreased from approximately 8% to roughly 6.7%.

“It seems that the Fed is not in a rush to cut rates; there’s no need to really rush into it,” stated Subadra Rajappa, the head of US rates strategy at the French bank Société Générale. “For this reason, the markets began to doubt the rate cut in March.”

Fed meet live: Although the Fed is expected to keep rates constant during its most recent policy meeting, which concludes on Wednesday, it has indicated that it plans to revers course and lower rates three times this year. The first rate cut has been expected by financial markets since March, but if the labor market continues to improve, the Fed’s officials may be reluctant to take action until the middle of the year.

“These data — which show demand for workers remains robust — do not support imminent rate cuts,’’ said Rubeela Farooqi, chief U.S. economist at High Frequency Economics, as per AP. “They support a cautious approach going forward, so that policymakers can be sure that inflation” will reach their 2% target.

Fed meet live: Prior to Wednesday’s opening, the U.S. stock markets were trending in different directions, with the Dow Jones Industrial Average beating other indexes because of its comparatively low exposure to technology. The focus now shifts to the monetary policy decision made today by the Federal Reserve.

Futures for the Dow Jones Industrial Average were up 53 points, or 0.1%, following the index’s record-breaking closing high on Tuesday. Futures on the Nasdaq 100 lost 1.2% while those on the S&P 500 fell 0.1%.

Following the release of their quarterly reports on Tuesday, Microsoft remained flat while Google’s parent company Alphabet dipped in after hours trade, suggesting that the technology industry is about to take a hit.

Fed meet live: While the US Federal Reserve is likely to leave rates unchanged, analysts suggest to not expect many concrete clues on shifts in the central bank’s policy stance in its post-meeting statement and in Fed Chair Jerome Powell’s remarks.

deVere Group’s chief executive Nigel Green says: “Wall Street and markets around the world will, of course, be looking for clues on shifts in the central bank’s policy stance in Chair Powell’s remarks after the meeting.”

“However, investors should not expect too many hints. We expect he will remain cautious on the future of potential rate cuts and want to see more evidence that the battle against inflation is won.”

‘’He’ll want to avoid cutting them prematurely and face the threat of inflation rising again. He will almost certainly push back against those market expectations of five cuts this year,” said Green.

Fed meet live: Wall Street continues to bet on a rate cut at the Fed’s upcoming meeting on March 19–20, even if no rate cut announced today.

Nearly 62% of investors still anticipate a rate decrease in March, according to the CME FedWatch tool (though the share has been declining). Even after Federal Reserve Governor Christopher Waller hinted this month that the Fed “would take our time to make sure we do this right,” the expectation still stands.

Additionally, the economy is still showing signs of strength. From October through December, the economy grew at a fairly strong annual rate of 3.3%. Unexpectedly high retail sales were also recorded in December.

Fed meet live: In its fiscal first quarter, Starbucks reported record revenue, but the company cut its sales forecast for the remainder of the year due to declining consumer spending in China and other areas.

The giant coffee firm in Seattle announced on Tuesday that, contrary to its earlier November projection of a 10-12% increase, it now anticipates revenue growth in its current fiscal year to be between 7% and 10%. Global same-store sales, or sales at stores that have been open for a minimum of a year, are predicted to increase by 4% to 6%, as opposed to the previous range of 5-7%.

Fed meet live: Losses in oil and Vodafone stocks caused the UK’s blue-chip index to decline on Wednesday, Reuters reported.

The blue-chip FTSE 100 fell 0.5%, as giants Shell and BP contributed to the index’s 1% decline, which was a result of declining oil prices.

Concerns about China’s faltering economy added to the pessimism as investors reduced their expectations on rapid interest rate reduction from major central banks, resulting in UK stocks posting their worst month since October.

Fed meet live: Prior to the COVID-19 outbreak, in 2019, the Fed lowered interest rates. In July of that year, the first of three cutbacks was announced.

Michael Gapen, head of US economics at Bank of America Securities, said this year’s rate cuts may be “different than any other time”, adding that the Fed would make a cut because inflation has approached the central bank’s 2% target.

Fed meet live: Oil prices fell on Wednesday, pressured by low economic activity in leading crude importer China and a surprise build in US crude inventories as oil producers ramped up output after following frigid weather earlier this month.

The US Energy Information Administration’s report revealed that weekly oil inventories increased by 1.2 million barrels last week, which put further pressure on prices. The March contract for Brent crude, which expires today, dropped 78 cents, or almost 0.9%, to $82.09 per barrel.

At $81.50, the more actively traded April contract saw a $1.00 decrease, or roughly 1.2%, in value. US West Texas Intermediate oil futures dropped $99, or 1.3 percent, to settle at $76.83. Reuters reports that early in the day, both benchmarks dropped by more than $1 per barrel.

Fed meet live: Reduced rates might “inject activity into the currently sluggish mortgage origination market,” according to Michele Raneri, vice president of TransUnion’s US research and consulting.

“Since the 2020-2021 dip in 30-year mortgage rates spurred an uptick in home purchase activity, there are many potential homebuyers on the sidelines waiting for meaningful rate reductions before making a purchase,” she said in a note on Tuesday, as per CNN.

Fed meet live: A broad measure of labor costs in the US cooled by more than anticipated, providing the Federal Reserve with additional leeway to lower interest rates this year as inflation pressures continue to ease.

According to Bureau of Labor Statistics data issued on Wednesday, the employment cost index—which tracks pay and benefits—grew by 0.9% in the fourth quarter, the least amount of growth since 2021, following a 1.1% increase in the previous three months.

“With labor productivity climbing 1.5% to 2.0% in recent quarters, this pace of compensation growth is consistent with the Fed’s inflation objectives,” Neil Dutta, head of economics at Renaissance Macro Research, said in a note as per Reuters. “At this point, the longer the Fed waits, the more they become a source of downside risk to the economic outlook.”

Fed meet live: The chairman of the Senate Banking Committee, Sen. Sherrod Brown, urged Fed Chair Powell in a letter dated Tuesday to lower interest rates “early this year.”

“It is your responsibility to set monetary policy that puts our country on a trajectory of both balanced growth and economic opportunity. Working families and small businesses have too much to lose if the Federal Reserve maintains high interest rates,” Brown said in the letter.

“It is increasingly evident that restrictive monetary policy is no longer the right tool for combating inflation.”

Brown’s letter was received a few days after Senator Elizabeth Warren criticised the Federal Reserve for exacerbating the state of house affordability.

Warren voiced concern about how “astronomical” mortgage rates have made a dire situation worse in a letter to Powell on Sunday. She also encouraged Fed officials to begin reducing borrowing prices.

Fed meet live: As investors awaited news from the Federal Reserve’s monetary policymaking committee, Wall Street opened mixed on Wednesday.

At the opening bell on Wednesday, the Dow increased by 73 points, or 0.2%. The Nasdaq Composite dropped by 0.8% while the S&P 500 dropped by 0.4%.

Following the release of the tech giants’ corporate results for the fourth quarter of 2023, Microsoft’s stock increased by 0.8% and shares of Alphabet, the parent company of Google, opened 5.6% down. Although Google’s ad income was less than anticipated, both businesses exceeded Wall Street’s projections.

Fed meet live: Euro zone government bonds rallied sharply on Wednesday, sending German yields on their biggest one-day slide in four months, after soft data from both sides of the Atlantic supported the notion that interest rates are about to decline.

US data on wage growth and private-sector employment both undershot expectations, which supercharged a rally in short-dated Treasuries that fed into a fresh burst lower for European yields in afternoon trading.

With its steepest daily decline since late September, the benchmark 10-year Bund yield fell as far as 11.9 basis points. The yield is expected to climb for the first time since September.

Fed Meet live: Gold climbed on Wednesday and was on course to end its three-month winning streak as markets await Fed’s decision.

US gold futures increased 0.7% to $2,044.90, while spot gold increased by 0.4% to $2,045.69 per ounce. As speculators reduced their expectations on a March start to US rate reduction, gold fell 0.8% so far this month after hitting a record high in December, according to news agency Reuters.

Fed meet 2024 live: Employers will be under pressure if the economy is constrained and inflation keeps declining with high interest rates. This is because rising “real” rates would imply higher costs.

“If we continue to make surprising progress faster than was forecast on inflation, then we have to take that into account in determining the level of restrictiveness,” Chicago Fed President Austan Goolsbee said in a recent interview with CNBC.

Fed meet 2024 live: The markets anticipate that later this year, the Fed and other major central banks will be able to reduce interest rates. Trading.Biz financial analyst Saqib Iqbal thinks that the currency wouldn’t increase significantly in response to any Fed remarks viewed as less than dovish. Seasonal considerations combined with tonight’s stance could sustain the dollar bid. Based on a bottom found in the final week of 2023, the DXY can rise to 104.00 and above, indicating a 3.4% gain in 2024, according to Iqbal.

Fed meet 2024 live: In a prediction presented on Tuesday, the International Monetary Fund (IMF) expressed its hope of a soft landing for the US. The IMF predicted that the US will grow at an annual pace of 2.5% this year, down from last year but with an improved outlook from a previous prediction.

Fed meet 2024 live: Sujan Hajra, Chief Economist at Anand Rathi Shares & Stock Brokers underscored that the recent trends indicate a significant softening of inflation in the US, fueling market expectations of a potential rate cut by the Federal Reserve as early as March 2024.

However, considering the stronger-than-expected US economic growth, the robust state of the labour market, and the risk of reigniting inflation by prematurely initiating rate cuts, a rate reduction in March seems unlikely, Hajra said.

Even with the looming possibility of the US economy entering a recession in the latter half of 2024, the Federal Reserve is anticipated to exercise caution, aiming to maintain stable inflation expectations in the US, Hajra added.

Fed meet 2024 live: Earlier this month, Federal Reserve Governor Christopher Waller said that the central bank expects to cut rates this year, but it won’t be “rushed” to make the decision soon.

“The data we have received the last few months is allowing the Committee to consider cutting the policy rate in 2024. However, concerns about the sustainability of these data trends requires changes in the path of policy to be carefully calibrated and not rushed. In the end, I am feeling more confident that the economy can continue along its current trajectory,” he said in a statement.

Monetary policy, which is set by the Fed, is the single most significant factor influencing the value of the US dollar. The two main goals of the Fed are to promote full employment and stabilize prices by controlling inflation. Interest rate adjustments are its main weapon for achieving these two objectives.

The Fed will raise rates when inflation exceeds its 2% objective and prices are growing too quickly, which will strengthen the value of the USD. This weakens the value of the greenback because the Fed may cut interest rates when inflation drops below 2% or the unemployment rate rises too high.

In terms of inflation, Federal Reserve officials projected that core inflation would fall to 2.9% at year’s end from 3.2% in 2023, 2.4% in 2024, and 2.2% in 2025. It is eventually anticipated that it will reach the 2% goal by 2026.

Regarding PCE-tracked inflation, the Committee lowered its inflation estimate to 2.8% for 2023 (official statistics finally showed 2.6% for December), 2.4% for 2024, 2.1% for 2025, and 2.0% for 2026.

US Treasury yields slid Wednesday morning on signs of slowing labor costs and a weaker than expected reading of private payrolls as investors awaited the closely-watched Federal Reserve interest rate decision.

US labor costs rose less than expected in the fourth quarter, leading to the smallest annual increase in two years, the Labor Department said. Private payrolls, meanwhile, increased by 107,000 jobs last month, the ADP National Employment Report showed on Wednesday.

In China, demand for gold jewelery is likely to remain stable, as consumers have sought to preserve value in the safe-haven asset against a weakening currency and an increasingly uncertain economic outlook, Bloomberg reported. Still, the WGC expects a slowdown in the the country’s growth — a scenario that could limit households’ budgets for purchasing bars and coins, as well as jewellery.

According to the Conference Board, a business research firm, consumer confidence increased for the third consecutive month in January, reaching its highest level in two years.

Meanwhile, consumer spending remained high in December, indicating that Americans are not yet pulling back, as per the monthly Personal Consumption Expenditures (PCE) report, which was issued Friday. Meanwhile, American consumers have kept accruing debt in recent months, although this may not be a major issue just yet.

As attention shifts to the Fed’s meeting, gold prices rose to a two-week high on Tuesday, backed by a weaker dollar and lower Treasury yields, Reuters reported.

“Gold prices are rising in the domestic and international market as there is a strong buzz about the US central bank announcing a rate cut schedule in 2024. After the better-than-expected US economic data in recent weeks, the market has a strong belief that it is opportune for the US Federal Reserve to start interest rate cut from March 2024 or from May 2024,” said Anuj Gupta, Head — Commodity & Currency at HDFC Securities.

The outcome of the Federal Reserve’s policy meeting will have a big impact on the direction of gold prices during the next week. If the Fed maintains its hawkish stance in light of positive economic statistics, the adverse trend in gold prices may continue. However, any signs of a dovish pivot could result in a bullish turnaround in gold.

While the Fed has made it apparent that it is independent of Washington politics, some experts believe that the timing and extent of interest rate decreases may have a political impact.

Earlier, Senator Elizabeth Warren along with her three Democratic colleagues wrote to Powell, requesting the Fed to lower interest rates to assist reduce housing costs. Senate Banking Committee Chair Sherrod Brown, who is up for re-election, responded with a similar letter.

US President Joe Biden’s effort for a second term would not be impacted by lower borrowing prices as many voters and his challenger and Republican frontrunner Donald Trump criticise him for the high cost of living.

A recent Gallup poll revealed that over 27% of Americans believe the economy is good or excellent, an increase from 22% in December. Despite this, roughly 45 percent of respondents ranked the economy as poor.

The survey showed inflation is a major concern for many Americans as six out of ten adults reported that recent price rises have caused financial difficulty for their household.

The Fed had repeatedly raised the interest rate in an effort to control inflation, but inflation has slowed in recent months, and rates have remained steady. According to a December report, inflation climbed to 3.4%, which was higher than the Fed’s target of 2%.

The first 2024 inflation report will be announced on February 13, when the Bureau of Labor Statistics releases statistics for January prices.

As economists expect inflation to remain low this year, Oxford Economics has predicted that prices will rise at a 2.4% annual rate in 2024 before falling to 2.2% in 2025.

Approximately 50% of economists polled by FactSet predict the Fed will make its first 2024 cut at its March 19-20 meeting. FactSet shows around nine out of ten economists predict the central bank will cut interest rates during its meeting on April 30-May 1.

“It really is about how hard they push back against the potential for cuts as soon as March, or if they don’t push back,” said Sarah House, senior economist at Wells Fargo, in an interview to CNN.

“We’ll be looking at their emphasis on how restrictive policy is, any concerns around the labor market and how the [Fed] is viewing the risks to inflation’s outlook,” the economist added.

Total gold demand hit a record last year and is expected to expand again in 2024 as the US Federal Reserve moves toward cutting interest rates, potentially aiding prices, according to the World Gold Council.

Overall consumption climbed by about 3% to 4,899 tons last year, supported by strong demand in the opaque over-the-counter market, as well as from sustained central-bank buying, according to the WGC’s full-year report. That’s the highest total figure in data going back to 2010. Read more here

Despite dramatically increased interest rates, the US economy and job market have remained remarkably resilient, resulting in higher rates of borrowing for consumers and businesses. The Federal Reserve hiked its benchmark interest rate 11 times from March 2022 to July 2023, reaching a 23-year high of roughly 5.4%.

The Fed expects to see the job market cool from its 2021 and 2022 red-hot levels, lowering pressure on US firms to increase salaries to attract and retain employees. While higher interest rates have hampered hiring, employment growth remains quite healthy.

The United States witnessed an unexpected surge in job openings in December, an increase from November’s 8.9 million, with the number of workers leaving their jobs fell to its lowest point in over three years, most likely due to a desire for better opportunities.

As per the Associated Press report, the employers posted around 9 million jobs in December, indicating that the labor market is likely to stay resilient for the US Federal Reserve to begin decreasing interest rates in the first quarter.

Financial markets have been expecting a first rate decrease as early as March, but persistent labour market momentum may make Fed members reluctant to act before the middle of the year. Read more here