Breaking neww ⚡️⚡️⚡️⚡️⚡️⚡️
SUMMARY OF FED DECISION JUNE 2024
1. FED keeps interest rates unchanged from 5.25% - 5.5%, the 7th consecutive time since the September 2023 meeting
2. The median forecast suggests only 1 rate cut in 2024, down from 3 in the March 2024 meeting 🦅
- There are 8 out of 19 FED officials who want to reduce interest rates twice this year
- There are 7 out of 19 officials who want to reduce interest rates just once this year
- And the remaining 4 officials want to maintain the current interest rate, increasing from level 2 at the March 2024 meeting.
3. Most agree that there will be a drastic reduction in interest rates in 2025. There are 5 cuts, a total of 1.25%, bringing interest rates to around 4.1% in 2025 (One less time than predicted in March to decrease 6 times, bringing interest rates to around 3.9% in 2025)
4. Raise forecasts for both core PCE and overall PCE inflation in 2024 from 2.6% to 2.8% and 2.4% to 2.6%, respectively -> Fed is not confident about the process of reducing inflation!
5. The FED said inflation "has cooled down but remains high" and the positive news is that the FED commented that the inflation reduction roadmap has made "modest progress", instead of "lack of progress" compared to comments. before
6. Unemployment rate is expected to remain around 4% in 2024 (Stay the same as currently) and may only increase to 4.2% in 2025
7. GDP growth forecast remains at +2.1% in 2024 as at the previous meeting. Both unemployment and GDP forecasts rule out the possibility of a hard landing by the FED 👍
In short, the FED was much MORE hawkish on interest rates compared to the March meeting, but this was not too surprising and still within market expectations.