January Fed Meeting: Dates and What to Expect

The FOMC assembly will happen on 30–31 January 2024, among the key dates merchants mark on their calendars. The market anticipated the Fed to maintain charges at 5.25–5.50%, however the FOMC has signaled a number of charge cuts all through 2024 as inflation weakens and the economic system slows. Octa explains what to anticipate.

Key Takeaways

The Federal Open Market Committee (FOMC) saved charges regular throughout its final assembly in December 2024 and signaled a number of charge cuts all through 2024.
On the eve of the subsequent FOMC assembly, as many as three Fed representatives advocated for sustaining regular rates of interest.
Markets nonetheless see charges unchanged in January and predict a 48% likelihood of a charge minimize on the subsequent assembly in March. If Fed Chairman Jerome Powell alerts a doable charge minimize in March, the USD will doubtless weaken in opposition to all main currencies.

On the final FOMC assembly held on 17–18 December 2023, rates of interest remained unchanged at 5.25%–5.50%. The quarterly launched Abstract of Financial Projections backed the December determination. In response to the printed information for 2024, GDP development will transfer from 1.5% to 1.4%, unemployment will stay unchanged at 4.1%, and PCE inflation will decline from 2.5% to 2.4%. Based mostly on this, FOMC members voted to alter the important thing charge, which was mirrored within the Fed’s dot plot. For 2024, the Fed’s median goal charge is now 4.6% vs. 5.1% in June—down 0.50 foundation factors.

On the eve of the subsequent FOMC assembly on 30–31 January 2024, as many as three Fed representatives expressed their opinion. They made it clear that they haven’t but seen proof to start out easing financial coverage:

• San Francisco Fed President Mary Daly stated throughout her Friday interview on Fox Enterprise: ‘Neither unemployment nor inflation makes me suppose that an adjustment is important.’

• Atlanta Fed President Raphael Bostic nonetheless anticipates the primary charge minimize will not be till the third quarter.

• Chicago Fed President Austan Goolsbee additionally emphasizes the significance of getting extra related information.

The policymakers spoke simply hours earlier than the Fed’s conventional pre-meeting communications blackout interval. The market anticipated the Fed to maintain charges regular at a goal of 5.25%–5.50%.

Based mostly on info from official sources, it appears like the speed will stay unchanged in January,’ stated Kar Yong Ang, Octa’s monetary market analyst. ‘The Fed could begin slicing charges within the spring, assuming they’ve sufficient information to be assured that inflation has been overwhelmed,’ he added.

Markets nonetheless see charges unchanged in January and predict a 48% likelihood of a charge minimize on the subsequent assembly in March, based on the CME FedWatch Instrument. Merchants ought to focus most of their consideration on the rhetoric accompanying the choice. If Fed Chairman Jerome Powell alerts a doable charge minimize in March, the will doubtless weaken in opposition to all main currencies. could decline to the 140.00–142.00 vary by the top of this buying and selling week.