#FOMCMeeting 🔥 **FOMC Meeting Recap: Rates on Hold, Eyes on Future Cuts**
The Federal Reserve concluded its latest policy meeting by holding interest rates steady at **5.25%–5.50%**, marking the seventh consecutive pause. While inflation remains above target, Chair Jerome Powell expressed growing confidence in the disinflation trend, suggesting the possibility of policy easing later this year.
### 🔑 Key Takeaways:
1. **"Higher for Longer" Stays in Play:**
The Fed is keeping rates at a 23-year high, awaiting “greater confidence” that inflation is sustainably heading toward its 2% goal.
2. **QT Taper Begins in July:**
The Fed will **slow the pace of its balance sheet runoff**, reducing monthly Treasury roll-offs from \$60B to \$25B to ease liquidity pressures without ending quantitative tightening.
3. **Dovish Shift in Rate Projections:**
The Fed’s updated **dot plot** now signals **one rate cut in 2024** (down from three) and **four cuts in 2025** (up from three), indicating cautious optimism.
4. **Inflation Shows Progress:**
Powell noted "modest further progress" on inflation, especially in core goods, but stressed the need for continued improvement—particularly in services.
5. **Labor Market Remains Solid:**
The job market is cooling gradually but remains resilient, giving the Fed room to wait before easing.
### 📊 Market Reaction:
* **Equities:** Modest gains followed Powell’s dovish tone and the QT taper announcement.
* **Bonds:** Treasury yields dipped, particularly in the 2–10 year range.
* **Rate Expectations:** Markets now price in a **\~65% chance of a September rate cut**.
### 🔭 Outlook:
The Fed remains data-dependent. A July rate cut is unlikely, but **September is now a live possibility**—contingent on upcoming inflation and labor market data. While patience is still the Fed's message, the path to a policy pivot is now clearly forming.
