The US Federal Reserve’s Federal Open Market Committee (FOMC) will decide on the next course of action in America’s monetary policy, today. Fed Chair Jerome Powell will announce the decision to cut or raise interest rates, or to maintain the status quo, on May 1 at 2 p.m. ET.
The FOMC meeting is in progress and is being conducted over two days – April 30 and May 1.
Following the Fed’s announcement, Chairman Jerome Powell will hold a press conference. Investors around the world will be closely following the comments made by the chairman of the biggest central bank in the world. Powell’s conference may provide investors with clues regarding the future path of monetary policy.
The US Federal Reserve has decided to keep the interest rates unchanged in the April FOMC Meeting.
The federal funds rate was left unchanged at the Federal Reserve’s May meeting, remaining in the 5.25%–5.50% range for the sixth time in a row. This is because persistent inflationary pressures and a tight labor market point to a stall in the process of bringing inflation back down to the 2% target this year.
Although inflation has decreased over the previous year, policymakers recognized that it is still high and that recent months have seen a noticeable lack of additional advancement toward the central bank’s objective. Additionally, the Fed stated that it will not lower the target range until it is more certain that inflation is steadily approaching the target.
The billion-dollar question remains unanswered – when will the Fed deliver the first cut?
Investors will pay particular attention to any comments made by Fed Chair Jerome Powell in the press conference today that could hint at when the Fed believes it is in the clear to begin cutting interest rates.
The inflationary pressures remain in the economy.
The US CPI data for March came in higher and even the PPI and PCE numbers are not favouring the Fed’s attempt to cut the rate.
In March, the Consumer Price Index increased 0.4 percent (monthly) and rose 3.5 percent over the last 12 months.
April 2024 CPI data are scheduled to be released on May 15, 2024.
Till then, the markets are expected to remain volatile amidst earnings data from companies, especially those from the tech and AI-led stocks.
