Federal Reserve’s Stance

Last FOMC Meeting Summary

The highly anticipated Federal Open Market Committee (FOMC) meeting on June 14, 2024, concluded with a unanimous decision to maintain the federal funds rate within the target range of 5.25% to 5.5%.

However, the Committee's updated economic projections, unveiled through the Summary of Economic Projections (SEP), painted a nuanced picture of the central bank's policy outlook.

The Fed’s New Dot Plot After Its May Policy Meeting: Chart

Dot Plot

Contrary to the market's expectations of three quarter-point rate cuts this year, the FOMC's median projection now envisions a solitary rate reduction in 2024.

This hawkish shift, coupled with upward revisions to inflation forecasts, initially sent shockwaves through the markets, causing bond yields to spike and temporarily dampening the stock rally ignited by the better-than-expected Consumer Price Index (CPI) data released earlier in the day.

During the subsequent press conference, Federal Reserve Chair Jerome Powell struck a measured tone, emphasizing the Committee's commitment to a data-dependent approach.

He acknowledged the improvements in inflation data but cautioned that sustained progress is necessary to achieve the Fed's 2% target. Powell underscored the current stance of monetary policy as restrictive, aimed at guiding inflation towards its desired level while supporting economic growth and labor market resilience.

  • "If the economy remains solid and inflation persists, we're prepared to maintain the target range for the federal funds rate as long as appropriate," Powell stated. "If the labor market were to weaken unexpectedly or if inflation were to fall more quickly than anticipated, we're prepared to respond."

The Chair's remarks highlighted the delicate balance the FOMC aims to strike between addressing inflationary pressures and preserving economic stability.

He noted that risks to the dual mandate of price stability and maximum employment have moved into a better equilibrium, reflecting the Fed's cautious optimism amidst the ongoing inflation battle…

  • It's all eyes on December. Officials will have a lot more data to sift through and they’ll give us another dot plot at that meeting which will set expectations for 2025…

$DJIA(.DJI)$ -0.09% to 38,712.21

$S&P 500(.SPX)$ +0.85% to 5,421.03

$NASDAQ(.IXIC)$ +1.53% to 17,608.44

$NVIDIA Corp(NVDA)$ $Apple(AAPL)$ $Microsoft(MSFT)$

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The market impacts presented are based on current available information and are subject to change as new data emerges and economic conditions evolve. Investors are advised to conduct thorough research and consult with professional advisors before making any investment decisions.

@TigerStars @CaptainTiger @Tiger_SG

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