Created
: 2024.11.08
2024.11.08 20:33
The Fed in its 6/7 Nov 2024 Federal Open Market Committee (FOMC) meeting, unanimously decided to reduce the target range of its Fed Funds Target Rate (FFTR) by 25-bps to 4.50-4.75%, in line with our and broad market expectations. The Fed also voted to cut the interest rate paid on reserves (IOER) balances by 25-bps to 4.65% while keeping the pace of QT unchanged, UOB Group's economist Alvin Liew notes.
"The most notable changes in the Nov monetary policy statement (MPS) were the removal of the entire statement, 'has gained greater confidence that inflation is moving sustainably toward 2 percent,' and replacing 'In light of the progress of inflation and the balance of risks' simply with 'In support of its goals'. During the press conference, FOMC Chair Powell explained that both modifications were 'not meant to send a further signal' and that 'further confidence' was a test for the first rate cut, and that test has been met."
Powell deflected most of the political questions except saying election outcomes will not impact policy decisions in the near term, and more importantly, a point-blank 'no' that he would not resign if the President-elect Trump asked him to leave, adding that it is 'not permitted under the law' for the US President to remove the Fed chair and Vice chairs. This left no doubt that Powell intends to complete his term which runs till May 2026.
"While we too agree that the US election results will not impede on the Fed's gradualism in the pace of easing trajectory for the rest of 2024, there could be serious questions being asked about the independence of the Fed once Trump assumes office in 2025. For now, we still expect one more 25-bps cut for the Dec 24 FOMC to bring rates to 4.25%-4.50% by end-2024, followed by 100 bps of cuts in 2025 (one 25-bps cuts per quarter) with one final 25-bps rate cut to bring us to the terminal rate of 3.25% by 1Q 2026.
Created
: 2024.11.08
Last updated
: 2024.11.08
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy