Next Fed Meeting: When It Is in March and What To Expect

The FOMC uses monetary policy to influence the availability of money and credit. It announces its decisions at a committee meeting eight times a year, explaining its actions by commenting on how well the economy is performing, especially inflation and unemployment. The Federal Open Market Committee (FOMC) meeting is a meeting of the central bank of the United States. The FOMC meets eight times per year and looks at both domestic and international economic conditions to determine whether interest rates should be increased or decreased. In addition, the FOMC also discusses policy changes that may be necessary for employment or inflation. The Federal Open Market Committee, or FOMC, is a group of economists and bankers who make decisions about monetary policy for the United States.

  1. The FOMC issues a policy statement following each regular meeting that summarizes the Committee’s economic outlook and the policy decision at that meeting.
  2. But looking ahead, analysts are projecting 2024 S&P 500 EPS will rebound by 11.6%.
  3. While the Fed raised rates on Wednesday, Chair Jerome Powell made a point of noting that the lagging effect is still something officials are watching carefully.
  4. Instead, market participants are eager to see where the central bank stands on its projections for interest rates going forward.
  5. “People generally think that we’re at or near that. And I think it’s not likely that we will, we’ll hike, although we don’t take that possibility off the table.”
  6. The term “monetary policy” refers to the actions undertaken by a central bank, such as the Federal Reserve, to influence the availability and cost of money and credit to help promote national economic goals.

“This means we could see mortgage rates noticeably change while the Fed holds its target rate steady.” Fed Chair Jerome Powell began his post-meeting press conference by reiterating that inflation is “still too high,” later adding that a March rate cut wasn’t likely. The call, which was widely expected and unanimous, keeps the target range for the federal-funds rate at 5.25%-5.50%.

When is the next FOMC meeting?

This means a stronger US dollar as an increasing number of people want to take advantage of the better rate and will convert their currency into USD. It’s important because it can be a vital clue to a forex trader regarding the US dollar’s evolution. For example, if the Fed announces a dovish stance, you know there’s a good chance they will lower interest rates. A lower interest rate might reduce the value of the US dollar, which means a short position might be a good idea. Remember, a hawkish stance means the Feed wants to hike interest rates, while a dovish stance means the Fed wants to cut interest rates.

The Federal Reserve possesses the tools necessary to increase or decrease the money supply. This is done through OMOs, adjusting the discount rate, and setting bank reserve requirements. The Fed’s Board of Governors is in charge of setting the discount rate and reserve requirements, while the FOMC is specifically in charge of OMOs, which entails buying and selling government securities. For example, to tighten the money supply and decrease the amount of money available in the banking system, the Fed would offer government securities for sale.

Board of Governors of the Federal Reserve System

Americans’ pessimistic outlook has puzzled economists for the past two years, given that the economy has been fairly strong. Unemployment has stayed close to historic lows and consumer spending has been resilient. Plus, gross domestic product grew at a 3.3% annual rate in the fourth quarter, faster than economists had predicted. Consumer spending on both goods and services during the holidays gave the economy a significant boost, with retail sales coming ahead of expectations in the last three months of the year.

The Fed has already reiterated that economic activity needs to slow down much more. U.S. macroeconomic data show that the economy is not slowing as much as initially anticipated. The U.S. ISM services index for September 22 decreased very slightly from August 22 to 56.7.

The Fed’s dot plot of central bankers’ rate expectations calls for four more cuts in 2025 and three cuts in 2026. The Fed reported in January that the American economy remains strong and the labor market resilient–but also acknowledged that the pace of growth had slowed down compared to the first parts of 2023. Experts expect the Fed to continue to hold rates steady through the beginning of the year before making cuts, barring any sudden macroeconomic events. The Federal Open Market Committee (FOMC) is the monetary policy-making body of the Federal Reserve System, the central bank of the United States. The FOMC holds eight regularly scheduled meetings during the year and may hold other meetings as needed to set emergency short-term interest rates or implement other policy tools.

See what changed in the new Fed statement

The Federal Open Market Committee meetings are important to forex traders because this is when the Federal Reserve, the central bank of the U.S., announces their decision on interest rates. FOMC meeting refers to the 12 members of the FOMC who meet eight times a year to discuss monetary policy. The committee can also meet whenever it feels necessary and believes that it needs to act, such as during a financial crisis. Despite persistent inflation and elevated interest rates, investors have piled into stocks and other risk assets in recent months as concerns over a hard landing for the U.S. economy have dissipated. The widely followed benchmark for the broad market recently made its first new all-time high in over two years. U.S. gross domestic product, or GDP, grew 3.3% in the fourth quarter, but the Fed projects full-year GDP growth of just 1.4% in 2024 and 1.8% in 2025.

About 4 in 10 of economists polled by FactSet said they believe the first cut of 2024 will occur at the Fed’s March meeting. Roughly nine in 10 economists believe the central bank will issue a rate reduction at its April 30-May 1 meeting, FactSet shows. Federal Reserve Chair Jerome Powell indicated that central bank officials still aren’t convinced that inflation is on a sustainable path toward the 2% target.

“Recent indicators suggest that economic activity has been expanding at a moderate pace,” the statement now reads. The Fed cited robust job gains and low unemployment as evidence of that moderate growth. However, some economists and market participants say July’s rate hike will be the gitlab vs github vs bitbucket vs azure devops last one of this cycle, citing progress on inflation and a slowing economy. The inflation fight isn’t over, but central bank policymakers will start to discuss policy easing amid signs of cooling in both inflation and the labor market, according to Federal Reserve Chair Jerome Powell.

Stock prices can show the markets’ expectations of future interest rates, Gibson says. A big drop in the lead-up to an FOMC meeting, for example, indicates that the markets are expecting a higher-than-average rate increase. When the Fed states their stance https://traderoom.info/ is dovish, this means they are attempting to protect the nation from deflation and avoid economic contraction. Thus, the Fed implements various policies and strategies designed to stimulate the economy and to stop prices from dropping too low.

Meeting eight times a year, and occasionally more if the situation demands, the FOMC deliberates on the nation’s interest rates and other financial policies. These decisions influence everything from the rates you get on your savings account to the cost of borrowing for homes and businesses. The fed funds rate controls the availability of money to invest in houses, businesses, and ultimately in your salary and investment returns as a result. This directly affects the value of your retirement portfolio, the cost of your next mortgage, the selling price of your home, and the potential for your next raise. Federal Reserve Chair Jerome Powell said that the central bank is not looking for a significant softening in the labor market or a decline in economic growth at this point as it assesses whether, and when, to lower interest rates.

Stock Market News

Instead, market participants are eager to see where the central bank stands on its projections for interest rates going forward. The Federal Reserve’s rate cut cycle will likely begin in June, said Whitney Watson, global co-head and co-chief officer of fixed income and liquidity solutions at Goldman Sachs Asset Management. Federal Reserve Chair Jerome Powell admitted the central bank’s efforts to cool inflation have started to take hold, though he reiterated there is still further to go. Powell also said that activity in the housing sector has “flattened out” after picking up over the summer, and said that data suggested that higher rates are slowing business investment. “Recent indicators suggest that growth in economic activity has slowed substantially from the outsized pace seen in the third quarter. Even so, GDP is on track to expand around 2.5% for the year as a whole,” Powell said. Fed Chair Jerome Powell said while the Federal Reserve’s policy rate is likely at or near its peak in this tightening cycle, he would not rule out another rate hike.

Economics

That’s because consumers may delay their borrowing until a later date as they wait for interest rates to eventually come down. “We waited a whole year for the Fed to pivot and finally as a Christmas present they gave us a pivot,” JPMorgan’s chief global strategist told CNBC’s “Power Lunch” on Wednesday. “I am a little worried that the most dangerous time for the economy is when a tight Fed begins to ease.” Market participants cheered as equities rallied Wednesday afternoon, fueled by the Federal Reserve’s signal that it would ease interest rates moving forward.

Some investors pay close attention to the Fed calendar for upcoming FOMC meeting dates because they prefer to avoid trading. Until the final decisions of the FOMC are made public, asset prices tend to fluctuate unpredictably. This leads to a higher level of risk due to market volatility, which makes it easy to lose money. Still, Federal Reserve economists are anticipating a difficult 2024 for the U.S. economy. In December, Fed officials projected a median fed funds rate of 4.6% in 2024 and indicated just three rate cuts are likely in 2024. This, of course, will depend on the trajectory of inflation and the state of the economy.

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