As the US has registered strong economic and inflation data. This development&nbsp;continues to shape the debate among Federal Reserve policymakers over the pace and extent of interest rate cuts. Further, investors on November 15, reduced their expectations for a rate reduction at the central bank's upcoming FOMC meeting, according to a detailed report by Reuters.

In the most recent rounds of discussions on the US monetary policy, US central bankers continued to put their faith, that inflation was slowly but surely coming under control and would allow the central bank to lower its benchmark rate over time from the current 4.5 per cent-4.75 per cent range, a level felt to discourage spending and investment, to a more neutral setting, the Reuters report explained further.

Still, how fast the central banks does that, and what level represents "neutral," remain a topic of debate, with Fed Chair Jerome Powell on November 14 stating&nbsp;that the economy's continued strength indicates that the Fed could take its time with the discussion.

The signs of increasing doubts over what a month ago was a normal expectation,&nbsp;for a quick run of cuts into next year. This comes as a major political shift is underway in the US, following Donald Trump's victory in last week's election, with Wall Street trying to capture what it sees as further inflationary pressures rising in the year ahead as the incoming Republican president pushes for tax cuts, higher tariffs and a crackdown on immigration.

Fed officials have been reluctant to say they are taking that into account, but investors already are and market bets on how quickly and how much the Fed will cut rates have ratcheted down over the last week the Reuters report added further. Boston Fed President Susan Collins said she did not see a big urgency to lower rates but did not rule out another rate cut at the Fed's next meeting on Dec. 17-18.

US stocks tanked on November 15, after Federal Reserve Chair Jerome Powell, clearly signalled a slower pace of interest-rate cuts. And while several Fed policymakers appear to be on the fence over another rate cut in December, they have also signalled that skipping a meeting would mean they are going slower on rate cuts rather than stopping altogether.

The policy rate is expected to fall to 2.9 per cent in 2026

These projections also reflected an expectation that the policy rate would fall to 2.9 per cent sometime in 2026. Investors in contracts tied to that rate now see rates staying as much as a percentage point higher than that. The Fed will release fresh forecasts in December when it makes its next rate-setting decision.

Market participants and investors will carefully follow the next decision of the Federal Reserve to make informed investment decisions and to gain clues on the overall strength of the US economy.

As the US has registered strong economic and inflation data. This development continues to shape the debate among Federal Reserve policymakers over the pace and extent of interest rate cuts.

As the US has registered strong economic and inflation data. This development continues to shape the debate among Federal Reserve policymakers over the pace and extent of interest rate cuts. Further, investors on November 15, reduced their expectations for a rate reduction at the central bank's upcoming FOMC meeting, according to a detailed report by Reuters. In the most recent rounds of discussions on the US monetary policy, US central bankers continued to put their faith, that inflation was slowly but surely coming under control and would allow the central bank to lower its benchmark rate over time from the current 4.5 per cent-4.75 per cent range, a level felt to discourage spending and investment, to a more neutral setting, the Reuters report explained further. Still, how fast the central banks does that, and what level represents "neutral," remain a topic of debate, with Fed Chair Jerome Powell on November 14 stating that the economy's continued strength indicates that the Fed could take its time with the discussion. The signs of increasing doubts over what a month ago was a normal expectation, for a quick run of cuts into next year. This comes as a major political shift is underway in the US, following Donald Trump's victory in last week's election, with Wall Street trying to capture what it sees as further inflationary pressures rising in the year ahead as the incoming Republican president pushes for tax cuts, higher tariffs and a crackdown on immigration. Fed officials have been reluctant to say they are taking that into account, but investors already are and market bets on how quickly and how much the Fed will cut rates have ratcheted down over the last week the Reuters report added further. Boston Fed President Susan Collins said she did not see a big urgency to lower rates but did not rule out another rate cut at the Fed's next meeting on Dec. 17-18. US stocks tanked on November 15, after Federal Reserve Chair Jerome Powell, clearly signalled a slower pace of interest-rate cuts. And while several Fed policymakers appear to be on the fence over another rate cut in December, they have also signalled that skipping a meeting would mean they are going slower on rate cuts rather than stopping altogether. The policy rate is expected to fall to 2.9 per cent in 2026 These projections also reflected an expectation that the policy rate would fall to 2.9 per cent sometime in 2026. Investors in contracts tied to that rate now see rates staying as much as a percentage point higher than that. The Fed will release fresh forecasts in December when it makes its next rate-setting decision. Market participants and investors will carefully follow the next decision of the Federal Reserve to make informed investment decisions and to gain clues on the overall strength of the US economy.

Strong US data weakens case for December Fed rate cut

Bitcoin has rallied to a record recently; this is primarily due to Donald Trump's decisive US presidential election victory, with the bitcoin price now braced for a huge "game-changer” role, according to a detailed report by Forbes.

Bitcoin races towards $100,000, crypto market rushes towards $3 trillion <o:p></o:p>

The bitcoin price has closed in on $100,000 per bitcoin, rocketing higher as a "perfect storm" pushes the combined crypto market back above $3 trillion. This $3 trillion market cap was last touched by the cryptocurrency in 2021, the Forbes report detailed further.

It is important to note that, as Tesla billionaire and Trump advisor Elon Musk has came out with a serious US "bankruptcy" warning, a top Federal Reserve official has suddenly curtailed his criticism of bitcoin and crypto.

"I will have an open mind," Minneapolis Federal Reserve president Neel Kashkari told Coindesk this week.

Brief history of Bitcoin<o:p></o:p>

Bitcoin is the first decentralized cryptocurrency. Nodes in the peer-to-peer Bitcoin network verify transactions through cryptography and record them in a public distributed ledger, called a blockchain, without central oversight.

Consensus between nodes is achieved using a computationally intensive process based on proof of work, called mining, that secures the bitcoin blockchain. Mining consumes large quantities of electricity and has been criticized for its environmental impact.

Bitcoin was earlier termed as worthless<o:p></o:p>

Kashkari has earlier called bitcoin and cryptocurrencies more broadly "worthless," "fraudulent" and "nonsense" and in 2020 compared the crypto market to a "giant garbage dumpster."

Still, despite assuring to remain open to crypto, Kashkari asked, "other than as a speculative asset, what does it actually do in the real economy?"

The bitcoin price rally this year has been called a "debasement trade" by JPMorgan analysts who have predicted the bitcoin price could continue to rally on fears of US dollar devaluation and inflation. Due to the upcoming Trump administration there is a possibility of inflation in the US picking up again.

Musk tasked with controlling government spending<o:p></o:p>

Tesla billionaire Elon Musk, appointed to lead the Doge department of government efficiency under the new Trump administration, has led a growing backlash against out-of-control US government spending that exploded through the Covid-era lockdowns.

Kashkari's weakening of his outlook towards bitcoin and crypto comes as US president-elect Trump has surrounded himself with heavily pro-bitcoin and crypto advisors, including Howard Lutnick, the chief executive of Wall Street giant Cantor Fitzgerald who is heading up Trump's transition team and is in the running to be his Treasury secretary pick, the Forbes report explained further.

Trump's victory has pumped the price of Bitcoin higher over the last few days as traders bet his administration will mean an easing of US crypto regulations and a change of leadership at regulatory agencies that have been pessimistic about crypto markets.

The optimism due to Trump’s promise of turning America into the ‘Crypto capital of the world’ is still running high and is fuelling the endless rally in Bitcoin. Trump has also shared plans to create a US bitcoin strategic reserve, predicting the bitcoin price could eventually eclipse gold and the possibility of using bitcoin to pay off the US's $35 trillion debt pile. 

This looks difficult as an idea still it is crucial to see the ultimate stance of the upcoming Trump administration towards Bitcoin and the crypto world as a whole.

Global investors, market participants and crypto enthusiasts will carefully follow these developments. These developments will help them in making informed investment calls.

Bitcoin has rallied to a record recently; this is primarily due to Donald Trump's decisive US presidential election victory, with the bitcoin price now braced for a huge "game-changer” role, according to a detailed report by Forbes.

Bitcoin has rallied to a record recently; this is primarily due to Donald Trump's decisive US presidential election victory, with the bitcoin price now braced for a huge "game-changer” role, according to a detailed report by Forbes. Bitcoin races towards $100,000, crypto market rushes towards $3 trillion The bitcoin price has closed in on $100,000 per bitcoin, rocketing higher as a "perfect storm" pushes the combined crypto market back above $3 trillion. This $3 trillion market cap was last touched by the cryptocurrency in 2021, the Forbes report detailed further. It is important to note that, as Tesla billionaire and Trump advisor Elon Musk has came out with a serious US "bankruptcy" warning, a top Federal Reserve official has suddenly curtailed his criticism of bitcoin and crypto. "I will have an open mind," Minneapolis Federal Reserve president Neel Kashkari told Coindesk this week. Brief history of Bitcoin Bitcoin is the first decentralized cryptocurrency. Nodes in the peer-to-peer Bitcoin network verify transactions through cryptography and record them in a public distributed ledger, called a blockchain, without central oversight. Consensus between nodes is achieved using a computationally intensive process based on proof of work, called mining, that secures the bitcoin blockchain. Mining consumes large quantities of electricity and has been criticized for its environmental impact. Bitcoin was earlier termed as worthless Kashkari has earlier called bitcoin and cryptocurrencies more broadly "worthless," "fraudulent" and "nonsense" and in 2020 compared the crypto market to a "giant garbage dumpster." Still, despite assuring to remain open to crypto, Kashkari asked, "other than as a speculative asset, what does it actually do in the real economy?" The bitcoin price rally this year has been called a "debasement trade" by JPMorgan analysts who have predicted the bitcoin price could continue to rally on fears of US dollar devaluation and inflation. Due to the upcoming Trump administration there is a possibility of inflation in the US picking up again. Musk tasked with controlling government spending Tesla billionaire Elon Musk, appointed to lead the Doge department of government efficiency under the new Trump administration, has led a growing backlash against out-of-control US government spending that exploded through the Covid-era lockdowns. Kashkari's weakening of his outlook towards bitcoin and crypto comes as US president-elect Trump has surrounded himself with heavily pro-bitcoin and crypto advisors, including Howard Lutnick, the chief executive of Wall Street giant Cantor Fitzgerald who is heading up Trump's transition team and is in the running to be his Treasury secretary pick, the Forbes report explained further. Trump's victory has pumped the price of Bitcoin higher over the last few days as traders bet his administration will mean an easing of US crypto regulations and a change of leadership at regulatory agencies that have been pessimistic about crypto markets. The optimism due to Trump’s promise of turning America into the ‘Crypto capital of the world’ is still running high and is fuelling the endless rally in Bitcoin. Trump has also shared plans to create a US bitcoin strategic reserve, predicting the bitcoin price could eventually eclipse gold and the possibility of using bitcoin to pay off the US's $35 trillion debt pile. This looks difficult as an idea still it is crucial to see the ultimate stance of the upcoming Trump administration towards Bitcoin and the crypto world as a whole. Global investors, market participants and crypto enthusiasts will carefully follow these developments. These developments will help them in making informed investment calls.

Fed shifts stance sparks $3 trillion Bitcoin and crypto price surge

Federal Reserve Chair Jerome Powell offered hawkish commentary following elevated US inflation prints. As a result, a December fed rate cut is firmly in the balance. This comes on the back of decent retail sales numbers and somewhat mixed manufacturing data.

Last week, the Fed chair said the US central bank is in no hurry to cut rates when the economy is holding up. The reason is that US&nbsp;consumers just keep on spending. Traders dialled back bets on a December cut to around 55 per cent — from 80 per cent before Powell's comments.

Broadly, the economy is humming along nicely, with the hold back in manufacturing being attributed to strikes and storms. The real question is whether Trump's victory will boost sentiment and the manufacturing industry with his "America first" agenda.

The toss-up bets on the Fed's rate cut in December reflect Trump's 2.0 uncertainty more than Powell's current rhetoric. The jobs report will be key on 6 December, and for now, markets are sticking with the view that a cut is more likely than not.

The macro calendar in the coming week looks light, and the core PCE deflator will be a key inflationary gauge to look for. The Fed&nbsp;is also conscious of the lowest 60 per cent by income population.

Inflation hits them the hardest. Loan defaults are on the rise and the proportion of credit card holders who only make the minimum monthly payments has been soaring. So, for now, the Fed's dilemma is fighting inflation and easing rates in a thin balancing act even before trump risks kick in.

Federal Reserve Chair Jerome Powell offered hawkish commentary following elevated US inflation prints. As a result, a December fed rate cut is firmly in the balance.

Federal Reserve Chair Jerome Powell offered hawkish commentary following elevated US inflation prints. As a result, a December fed rate cut is firmly in the balance. This comes on the back of decent retail sales numbers and somewhat mixed manufacturing data. Last week, the Fed chair said the US central bank is in no hurry to cut rates when the economy is holding up. The reason is that US consumers just keep on spending. Traders dialled back bets on a December cut to around 55 per cent — from 80 per cent before Powell's comments. Broadly, the economy is humming along nicely, with the hold back in manufacturing being attributed to strikes and storms. The real question is whether Trump's victory will boost sentiment and the manufacturing industry with his "America first" agenda. The toss-up bets on the Fed's rate cut in December reflect Trump's 2.0 uncertainty more than Powell's current rhetoric. The jobs report will be key on 6 December, and for now, markets are sticking with the view that a cut is more likely than not. The macro calendar in the coming week looks light, and the core PCE deflator will be a key inflationary gauge to look for. The Fed is also conscious of the lowest 60 per cent by income population. Inflation hits them the hardest. Loan defaults are on the rise and the proportion of credit card holders who only make the minimum monthly payments has been soaring. So, for now, the Fed's dilemma is fighting inflation and easing rates in a thin balancing act even before trump risks kick in.

Fed's slightly hawkish tone brings December rate cut into question

The Federal Reserve on Thursday approved its second consecutive interest rate cut, reducing its benchmark rate by a quarter percentage point (25 basis points) to a target range of 4.50 per cent to 4.75 per cent, according to a detailed report by CNBC.

This move follows September’s larger half-point reduction and marks the Fed’s ongoing effort to fine-tune monetary policy in response to the evolving economic conditions. The decision, made by the Federal Open Market Committee (FOMC), was unanimous, a shift from the September meeting when there was a dissenting vote from Governor Michelle Bowman, the CNBC report explained further.

What is the impact of this rate cut?<o:p></o:p>

The rate cut primarily affects the overnight borrowing rate between banks but also has a ripple effect on consumer borrowing costs, including mortgages, credit cards, and auto loans. The move was widely anticipated, as Fed officials had signaled the possibility of further easing in recent statements. Markets responded positively, with the Nasdaq leading gains, rising 1.5 per cent, and both the Nasdaq and S&amp;P 500 closing at record highs.

Fed’s outlook on the economy<o:p></o:p>

In its post-meeting statement, the Fed showed subtle changes in its outlook on the economy. While the committee acknowledged that inflation is easing, it also tempered its optimism about the labour market.

The statement noted that "conditions have generally eased," with the unemployment rate rising slightly but remaining low. Despite this, the Fed reiterated that the economy continues to grow at a solid pace, and it emphasized that its primary objective remains balancing inflation control with supporting job growth.

Fed Chair Jerome Powell described the rate cut as part of a “recalibration” of policy. He explained that the Fed aims to steer the economy toward a more neutral stance, one where monetary policy neither stimulates nor restrains economic activity too much. Powell stressed that the rate cuts are intended to support continued progress on inflation while maintaining a strong labour market.

There is growing uncertainty over the extent of future rate cuts, as the US economy shows resilience. The third-quarter GDP growth rate came in at 2.8 per cent, slightly below expectations but still robust compared to the historical trend. Job growth has also slowed, with nonfarm payrolls increasing by just 12,000 in October, partly due to weather-related disruptions and ongoing labour strikes.

The Fed’s cautious approach comes amid a changing political climate, with President-elect Donald Trump’s victory in the recent election raising questions about the impact of his policies on inflation and economic growth. While Powell insisted that the election outcome would not influence the Fed’s immediate policy decisions, there is speculation that the Fed may adjust its approach depending on how Trump’s economic agenda affects inflation and overall economic conditions.

Looking ahead, market participants expect that the Fed will likely approve another quarter-point cut in December before pausing to assess the full effects of its actions. The CME Group’s FedWatch tool suggests that the Fed may continue its gradual easing process into 2025, with a target terminal rate around 2.9 per cent. However, despite the Fed’s rate cuts, market interest rates, including mortgage and Treasury yields, have remained relatively high.

Objective of the Federal Reserve

The Fed is aiming for a “soft landing” bringing inflation down to its 2 per cent target without triggering a recession. Recent inflation data shows the Fed’s preferred measure at 2.1 per cent, while the core inflation rate, excluding volatile food and energy prices, stands at 2.7 per cent. The central bank's path forward will depend on balancing these inflation trends with broader economic conditions.

The Federal Reserve on Thursday approved its second consecutive interest rate cut, reducing its benchmark rate by a quarter percentage point (25 basis points) to a target range of 4.

The Federal Reserve on Thursday approved its second consecutive interest rate cut, reducing its benchmark rate by a quarter percentage point (25 basis points) to a target range of 4.50 per cent to 4.75 per cent, according to a detailed report by CNBC. This move follows September’s larger half-point reduction and marks the Fed’s ongoing effort to fine-tune monetary policy in response to the evolving economic conditions. The decision, made by the Federal Open Market Committee (FOMC), was unanimous, a shift from the September meeting when there was a dissenting vote from Governor Michelle Bowman, the CNBC report explained further. What is the impact of this rate cut? The rate cut primarily affects the overnight borrowing rate between banks but also has a ripple effect on consumer borrowing costs, including mortgages, credit cards, and auto loans. The move was widely anticipated, as Fed officials had signaled the possibility of further easing in recent statements. Markets responded positively, with the Nasdaq leading gains, rising 1.5 per cent, and both the Nasdaq and S&P 500 closing at record highs. Fed’s outlook on the economy In its post-meeting statement, the Fed showed subtle changes in its outlook on the economy. While the committee acknowledged that inflation is easing, it also tempered its optimism about the labour market. The statement noted that "conditions have generally eased," with the unemployment rate rising slightly but remaining low. Despite this, the Fed reiterated that the economy continues to grow at a solid pace, and it emphasized that its primary objective remains balancing inflation control with supporting job growth. Fed Chair Jerome Powell described the rate cut as part of a “recalibration” of policy. He explained that the Fed aims to steer the economy toward a more neutral stance, one where monetary policy neither stimulates nor restrains economic activity too much. Powell stressed that the rate cuts are intended to support continued progress on inflation while maintaining a strong labour market. There is growing uncertainty over the extent of future rate cuts, as the US economy shows resilience. The third-quarter GDP growth rate came in at 2.8 per cent, slightly below expectations but still robust compared to the historical trend. Job growth has also slowed, with nonfarm payrolls increasing by just 12,000 in October, partly due to weather-related disruptions and ongoing labour strikes. The Fed’s cautious approach comes amid a changing political climate, with President-elect Donald Trump’s victory in the recent election raising questions about the impact of his policies on inflation and economic growth. While Powell insisted that the election outcome would not influence the Fed’s immediate policy decisions, there is speculation that the Fed may adjust its approach depending on how Trump’s economic agenda affects inflation and overall economic conditions. Looking ahead, market participants expect that the Fed will likely approve another quarter-point cut in December before pausing to assess the full effects of its actions. The CME Group’s FedWatch tool suggests that the Fed may continue its gradual easing process into 2025, with a target terminal rate around 2.9 per cent. However, despite the Fed’s rate cuts, market interest rates, including mortgage and Treasury yields, have remained relatively high. Objective of the Federal Reserve The Fed is aiming for a “soft landing” bringing inflation down to its 2 per cent target without triggering a recession. Recent inflation data shows the Fed’s preferred measure at 2.1 per cent, while the core inflation rate, excluding volatile food and energy prices, stands at 2.7 per cent. The central bank's path forward will depend on balancing these inflation trends with broader economic conditions.

Fed cuts interest rates by 0.25% amid economic shifts and inflation concerns

As the US prepares for Tuesday's presidential election, the Federal Reserve is poised to make a more predictable decision on interest rates just two days later. With inflation showing signs of easing, the Fed is expected to cut interest rates for the second time this year according to a detailed report by Associated Press.

Despite potential uncertainty surrounding the election results, analysts believe this will not impact the Fed's decision-making process during its upcoming two-day meeting, concluding on November 7, the Associated Press report elaborated further.

The Fed, led by Chair Jerome Powell, is anticipated to reduce its benchmark rate by a quarter-point to approximately 4.6 per cent. This follows a half-point cut in September. Economists predict another rate cut in December, with further reductions likely next year, aimed at lowering borrowing costs for consumers and businesses.

Fed’s approach reflects a shift towards a lower inflation environment<o:p></o:p>

Traditionally, the Fed lowers rates to stimulate a sluggish economy and boost a weak job market. However, the current economic landscape is different: growth is robust, with an unemployment rate of just 4.1 per cent. Despite recent disruptions from natural disasters and strikes affecting job growth, the Fed’s approach reflects a shift toward a "lower-inflation environment" rather than a direct response to economic weakness.

The Fed's aggressive rate hikes over the past year, prompted by soaring inflation that peaked at 9.1 per cent in June 2022, are now giving way to a more cautious stance. Year-over-year inflation has dropped to 2.4 per cent, nearing the Fed's target of 2 per cent. This significant decline suggests that high borrowing rates are no longer necessary and that previous restrictions on lending might be excessive.

Claudia Sahm, chief economist at New Century Advisors, emphasises that the rationale for maintaining elevated rates has dissipated as inflation concerns have subsided. Most Fed officials are advocating for gradual rate reductions, with discussions centered around finding the "neutral" rate that neither stimulates nor restrains economic growth. The Fed's rate-setting committee estimates this neutral rate at about 2.9 per cent, while many economists suggest it may be closer to 3 per cent to 3.5 per cent.

The future course of Fed policy could become more complex once a new president and Congress take office in January. If Donald Trump reclaims the presidency, his proposed economic policies, which include imposing high tariffs on imports and threatening the independence of the Fed, could potentially push inflation in the US economy to higher levels.

Economists have warned that such measures might force the Fed to reconsider its current path of rate cuts, as higher inflation could necessitate a halt or reversal of these reductions.

Powell is likely to address questions about the election's impact on the economy during the upcoming meeting, reiterating the Fed's commitment to apolitical decision-making. Economists remain concerned about Trump’s broader tariff proposals, predicting they could increase inflation significantly, with one report estimating an additional 2 percentage points of inflation next year if implemented.

Hence, as the Fed prepares to cut rates amid cooling inflation, the political landscape may soon introduce variables that complicate future monetary policy. The most powerful central bank in the world will need to navigate these changes carefully to maintain its goals for economic stability and growth.

As the US prepares for Tuesday's presidential election, the Federal Reserve is poised to make a more predictable decision on interest rates just two days later. With inflation showing signs of easing, the Fed is expected to cut interest rates for the second time this year according to a detailed report by Associated Press.

As the US prepares for Tuesday's presidential election, the Federal Reserve is poised to make a more predictable decision on interest rates just two days later. With inflation showing signs of easing, the Fed is expected to cut interest rates for the second time this year according to a detailed report by Associated Press. Despite potential uncertainty surrounding the election results, analysts believe this will not impact the Fed's decision-making process during its upcoming two-day meeting, concluding on November 7, the Associated Press report elaborated further. The Fed, led by Chair Jerome Powell, is anticipated to reduce its benchmark rate by a quarter-point to approximately 4.6 per cent. This follows a half-point cut in September. Economists predict another rate cut in December, with further reductions likely next year, aimed at lowering borrowing costs for consumers and businesses. Fed’s approach reflects a shift towards a lower inflation environment Traditionally, the Fed lowers rates to stimulate a sluggish economy and boost a weak job market. However, the current economic landscape is different: growth is robust, with an unemployment rate of just 4.1 per cent. Despite recent disruptions from natural disasters and strikes affecting job growth, the Fed’s approach reflects a shift toward a "lower-inflation environment" rather than a direct response to economic weakness. The Fed's aggressive rate hikes over the past year, prompted by soaring inflation that peaked at 9.1 per cent in June 2022, are now giving way to a more cautious stance. Year-over-year inflation has dropped to 2.4 per cent, nearing the Fed's target of 2 per cent. This significant decline suggests that high borrowing rates are no longer necessary and that previous restrictions on lending might be excessive. Claudia Sahm, chief economist at New Century Advisors, emphasises that the rationale for maintaining elevated rates has dissipated as inflation concerns have subsided. Most Fed officials are advocating for gradual rate reductions, with discussions centered around finding the "neutral" rate that neither stimulates nor restrains economic growth. The Fed's rate-setting committee estimates this neutral rate at about 2.9 per cent, while many economists suggest it may be closer to 3 per cent to 3.5 per cent. The future course of Fed policy could become more complex once a new president and Congress take office in January. If Donald Trump reclaims the presidency, his proposed economic policies, which include imposing high tariffs on imports and threatening the independence of the Fed, could potentially push inflation in the US economy to higher levels. Economists have warned that such measures might force the Fed to reconsider its current path of rate cuts, as higher inflation could necessitate a halt or reversal of these reductions. Powell is likely to address questions about the election's impact on the economy during the upcoming meeting, reiterating the Fed's commitment to apolitical decision-making. Economists remain concerned about Trump’s broader tariff proposals, predicting they could increase inflation significantly, with one report estimating an additional 2 percentage points of inflation next year if implemented. Hence, as the Fed prepares to cut rates amid cooling inflation, the political landscape may soon introduce variables that complicate future monetary policy. The most powerful central bank in the world will need to navigate these changes carefully to maintain its goals for economic stability and growth.

Fed set to cut rates amid election uncertainty and cooling inflation

The notion that interest-rate decisions will be made meeting by meeting. Based on incoming data has been emphasised by federal reserve chair Jerome Powell for the past several months. However, critics say this approach is creating volatility and weighing on the economy instead.

The Fed publishes the summary of every policymaker's quarterly economic projections. However, Powell has described those as only a snapshot of opinions at that particular moment. This may sound logical, but in the world of monetary policy, it's quite unusual.

Fed chair Powell, at his last press conference on September 18, said, "The actual things that we do will depend on the way the economy evolves."

During times of extreme uncertainty, central banks will let the information they get about the economy dictate their moves. However, investors and economists are criticising this approach by the Fed now.

They believe it's time for Powell to demonstrate greater confidence in his expectations for the economy over the next year or two. That would provide the public with a clearer picture of the direction Fed policy is taking.

Drew Matus, a strategist at Metlife Investment Management, referring to the Fed, said, "Their data dependence is creating more volatility." According to Matus, the majority of economic data is outdated, and data changes have the potential to challenge the state and trajectory of the economy. He added, "It is really not a great way to conduct policy."

The notion that interest-rate decisions will be made meeting by meeting. Based on incoming data has been emphasised by federal reserve chair Jerome Powell for the past several months.

The notion that interest-rate decisions will be made meeting by meeting. Based on incoming data has been emphasised by federal reserve chair Jerome Powell for the past several months. However, critics say this approach is creating volatility and weighing on the economy instead. The Fed publishes the summary of every policymaker's quarterly economic projections. However, Powell has described those as only a snapshot of opinions at that particular moment. This may sound logical, but in the world of monetary policy, it's quite unusual. Fed chair Powell, at his last press conference on September 18, said, "The actual things that we do will depend on the way the economy evolves." During times of extreme uncertainty, central banks will let the information they get about the economy dictate their moves. However, investors and economists are criticising this approach by the Fed now. They believe it's time for Powell to demonstrate greater confidence in his expectations for the economy over the next year or two. That would provide the public with a clearer picture of the direction Fed policy is taking. Drew Matus, a strategist at Metlife Investment Management, referring to the Fed, said, "Their data dependence is creating more volatility." According to Matus, the majority of economic data is outdated, and data changes have the potential to challenge the state and trajectory of the economy. He added, "It is really not a great way to conduct policy."

Is the Fed right in waiting for data for forward guidance?

As the Federal Reserve navigates the complexities of the current economic landscape, Governor Christopher Waller has underscored the necessity for caution regarding any future interest rate cuts. Speaking at a recent conference, Waller articulated his concerns about the potential implications of lowering rates too swiftly in an environment marked by persistent inflation and economic uncertainty as detailed in a report by CNBC. <o:p></o:p>

Waller's remarks come amid growing speculation about the Federal Reserve's next moves as it seeks to balance inflation control with economic growth. He noted that while there may be pressure to reduce rates to stimulate spending and investment, it is crucial to evaluate the broader economic indicators before making such decisions. "We must remain vigilant and ensure that any adjustments to interest rates are grounded in solid data," Waller stated, emphasising the need for a measured approach.<o:p></o:p>

The current economic climate presents a unique challenge for policymakers. Inflation remains a significant concern, with recent data indicating that consumer prices have not yet stabilised at desired levels. Waller pointed out that lowering interest rates prematurely could worsen inflationary pressures, undermining the progress made in stabilising prices. "We need to tread carefully," he cautioned, highlighting that a hasty reduction in rates could lead to unintended consequences.<o:p></o:p>

In addition to inflation, Waller addressed other critical factors influencing monetary policy decisions, including labour market dynamics and global economic conditions. He acknowledged that while some sectors are showing signs of resilience, others continue to face headwinds that could impact overall economic growth. "The labour market is robust, but we must consider regional disparities and sector-specific challenges," he remarked.<o:p></o:p>

In the final revision for second-quarter growth, the Commerce Department also punched up the level of gross domestic income gain to 3.4 per cent, an adjustment of 2.1 percentage points from the previous estimate and closer in line with GDP. The savings rate also was adjusted much higher, to 5.2 per cent.<o:p></o:p>

“These revisions suggest that the economy is much stronger than previously thought, with little indication of a major slowdown in economic activity,” Waller said.<o:p></o:p>

Looking ahead, Waller's comments reflect a broader sentiment among Federal Reserve officials who advocate for a cautious approach in navigating monetary policy. The central bank's dual mandate of promoting maximum employment while ensuring price stability requires careful calibration of interest rates based on comprehensive economic analysis.<o:p></o:p>

As discussions around interest rate policy continue to evolve, Waller's emphasis on caution serves as a reminder of the complexities involved in managing the economy. Stakeholders from various sectors will be closely watching how these deliberations unfold and what implications they may have for future economic conditions.<o:p></o:p>

Hence, as the Federal Reserve contemplates its next steps in monetary policy, Governor Christopher Waller's call for caution highlights the delicate balance required to foster sustainable economic growth while keeping inflation in check. The coming months will be crucial as policymakers assess the evolving economic landscape and make informed decisions regarding interest rates.<o:p></o:p>

<o:p>&nbsp;</o:p>

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As the Federal Reserve navigates the complexities of the current economic landscape, Governor Christopher Waller has underscored the necessity for caution regarding any future interest rate cuts.

As the Federal Reserve navigates the complexities of the current economic landscape, Governor Christopher Waller has underscored the necessity for caution regarding any future interest rate cuts. Speaking at a recent conference, Waller articulated his concerns about the potential implications of lowering rates too swiftly in an environment marked by persistent inflation and economic uncertainty as detailed in a report by CNBC. Waller's remarks come amid growing speculation about the Federal Reserve's next moves as it seeks to balance inflation control with economic growth. He noted that while there may be pressure to reduce rates to stimulate spending and investment, it is crucial to evaluate the broader economic indicators before making such decisions. "We must remain vigilant and ensure that any adjustments to interest rates are grounded in solid data," Waller stated, emphasising the need for a measured approach. The current economic climate presents a unique challenge for policymakers. Inflation remains a significant concern, with recent data indicating that consumer prices have not yet stabilised at desired levels. Waller pointed out that lowering interest rates prematurely could worsen inflationary pressures, undermining the progress made in stabilising prices. "We need to tread carefully," he cautioned, highlighting that a hasty reduction in rates could lead to unintended consequences. In addition to inflation, Waller addressed other critical factors influencing monetary policy decisions, including labour market dynamics and global economic conditions. He acknowledged that while some sectors are showing signs of resilience, others continue to face headwinds that could impact overall economic growth. "The labour market is robust, but we must consider regional disparities and sector-specific challenges," he remarked. In the final revision for second-quarter growth, the Commerce Department also punched up the level of gross domestic income gain to 3.4 per cent, an adjustment of 2.1 percentage points from the previous estimate and closer in line with GDP. The savings rate also was adjusted much higher, to 5.2 per cent. “These revisions suggest that the economy is much stronger than previously thought, with little indication of a major slowdown in economic activity,” Waller said. Looking ahead, Waller's comments reflect a broader sentiment among Federal Reserve officials who advocate for a cautious approach in navigating monetary policy. The central bank's dual mandate of promoting maximum employment while ensuring price stability requires careful calibration of interest rates based on comprehensive economic analysis. As discussions around interest rate policy continue to evolve, Waller's emphasis on caution serves as a reminder of the complexities involved in managing the economy. Stakeholders from various sectors will be closely watching how these deliberations unfold and what implications they may have for future economic conditions. Hence, as the Federal Reserve contemplates its next steps in monetary policy, Governor Christopher Waller's call for caution highlights the delicate balance required to foster sustainable economic growth while keeping inflation in check. The coming months will be crucial as policymakers assess the evolving economic landscape and make informed decisions regarding interest rates.

Fed governor Waller emphasises caution in potential interest rate cuts

During the recent Federal Reserve meeting in September, officials reached a consensus to reduce interest rates, yet they exhibited significant division regarding the extent of the cut. The minutes released on October 9 revealed that while a half-point reduction was ultimately decided upon, many members expressed uncertainty about this aggressive move, advocating instead for a more cautious approach, according to a detailed report by CNBC.

The report further stated that, the decision to lower rates by 50 basis points marked the first such action in over four years. This substantial cut reflects ongoing efforts to balance inflation trends with labor market concerns. However, some officials preferred a more modest reduction of 25 basis points, indicating a desire for reassurance that inflation was on a sustainable downward trajectory.

Further, only one member of the Federal Open Market Committee (FOMC), Governor Michelle Bowman, dissented against the half-point reduction, advocating for the smaller cut. This dissent is significant as it marks the first time since 2005 that a governor opposed an interest rate decision, underscoring the Fed's historical tendency towards consensus in monetary policy.

The minutes highlighted that several participants noted a preference for a 25 basis point cut during discussions. A few members suggested that such an adjustment would align with a gradual approach to policy normalisation, allowing more time for evaluation as the economy transitions. This sentiment reflects a cautious optimism among some officials regarding the current economic landscape.

In the wake of the meeting, economic data indicated that the labour market may be more robust than previously anticipated. In September alone, nonfarm payrolls rose by 254,000, significantly surpassing expectations, while the unemployment rate fell to 4.1 per cent. This data supports the notion that although the Fed may be entering an easing cycle, future cuts are likely to be less aggressive than the recent reduction.

Chair Jerome Powell and other Fed officials have indicated support for anticipated reductions as outlined in the dot plot, an unofficial forecast shared after the September meeting. The minutes emphasised that the decision to approve the 50 basis point cut was made "in light of progress on inflation and the balance of risks" concerning employment conditions. While a substantial majority of participants supported this larger reduction, specific numbers detailing dissenters were not disclosed.

Interestingly, some members had previously favoured a cut during July’s meeting which did not materialise. The minutes provided insights into discussions surrounding potential smaller cuts but offered less clarity regarding support for the larger reduction.

In his post-meeting press conference, Powell described the rate cut as a "recalibration." He noted that this adjustment should not be interpreted as indicative of a less favourable economic outlook or suggest that policy easing would accelerate beyond participants' assessments. This recalibration aims to align policy more closely with recent indicators of inflation and labour market conditions.

Historically, the Fed prefers to implement cuts in quarter-point increments; however, half-point reductions have occurred during times of economic crisis, most recently during the Covid pandemic and prior to that during the 2008 financial crisis.

Current market forecasts suggest that by late 2025, the federal funds rate may stabilise within the range of 3.25 per cent to 3.5 per cent. This aligns closely with CME Group's FedWatch median estimate of 3 per cent. Futures markets had previously indicated an aggressive trajectory but are now pricing in approximately a one-in-five likelihood that rates will remain unchanged at the upcoming November meeting.

In contrast to these developments, bond markets have reacted differently since the Fed's meeting; yields on both 10-year and 2-year Treasuries have surged by about 40 basis points. This divergence highlights ongoing volatility and uncertainty in financial markets as investors navigate shifting economic signals and Fed policy adjustments.

During the recent Federal Reserve meeting in September, officials reached a consensus to reduce interest rates, yet they exhibited significant division regarding the extent of the cut.

During the recent Federal Reserve meeting in September, officials reached a consensus to reduce interest rates, yet they exhibited significant division regarding the extent of the cut. The minutes released on October 9 revealed that while a half-point reduction was ultimately decided upon, many members expressed uncertainty about this aggressive move, advocating instead for a more cautious approach, according to a detailed report by CNBC. The report further stated that, the decision to lower rates by 50 basis points marked the first such action in over four years. This substantial cut reflects ongoing efforts to balance inflation trends with labor market concerns. However, some officials preferred a more modest reduction of 25 basis points, indicating a desire for reassurance that inflation was on a sustainable downward trajectory. Further, only one member of the Federal Open Market Committee (FOMC), Governor Michelle Bowman, dissented against the half-point reduction, advocating for the smaller cut. This dissent is significant as it marks the first time since 2005 that a governor opposed an interest rate decision, underscoring the Fed's historical tendency towards consensus in monetary policy. The minutes highlighted that several participants noted a preference for a 25 basis point cut during discussions. A few members suggested that such an adjustment would align with a gradual approach to policy normalisation, allowing more time for evaluation as the economy transitions. This sentiment reflects a cautious optimism among some officials regarding the current economic landscape. In the wake of the meeting, economic data indicated that the labour market may be more robust than previously anticipated. In September alone, nonfarm payrolls rose by 254,000, significantly surpassing expectations, while the unemployment rate fell to 4.1 per cent. This data supports the notion that although the Fed may be entering an easing cycle, future cuts are likely to be less aggressive than the recent reduction. Chair Jerome Powell and other Fed officials have indicated support for anticipated reductions as outlined in the dot plot, an unofficial forecast shared after the September meeting. The minutes emphasised that the decision to approve the 50 basis point cut was made "in light of progress on inflation and the balance of risks" concerning employment conditions. While a substantial majority of participants supported this larger reduction, specific numbers detailing dissenters were not disclosed. Interestingly, some members had previously favoured a cut during July’s meeting which did not materialise. The minutes provided insights into discussions surrounding potential smaller cuts but offered less clarity regarding support for the larger reduction. In his post-meeting press conference, Powell described the rate cut as a "recalibration." He noted that this adjustment should not be interpreted as indicative of a less favourable economic outlook or suggest that policy easing would accelerate beyond participants' assessments. This recalibration aims to align policy more closely with recent indicators of inflation and labour market conditions. Historically, the Fed prefers to implement cuts in quarter-point increments; however, half-point reductions have occurred during times of economic crisis, most recently during the Covid pandemic and prior to that during the 2008 financial crisis. Current market forecasts suggest that by late 2025, the federal funds rate may stabilise within the range of 3.25 per cent to 3.5 per cent. This aligns closely with CME Group's FedWatch median estimate of 3 per cent. Futures markets had previously indicated an aggressive trajectory but are now pricing in approximately a one-in-five likelihood that rates will remain unchanged at the upcoming November meeting. In contrast to these developments, bond markets have reacted differently since the Fed's meeting; yields on both 10-year and 2-year Treasuries have surged by about 40 basis points. This divergence highlights ongoing volatility and uncertainty in financial markets as investors navigate shifting economic signals and Fed policy adjustments.

Fed officials divided on interest rate cuts: Insights from September meeting minutes

The US economy is witnessing a surprising shift as bond traders prepare for a "no landing" scenario a situation where economic growth continues, inflation reignites, and the Federal Reserve has little room to cut interest rates. Recent months saw discussions centered around slowing growth and potential rate cuts, but a blowout jobs report has disrupted that narrative as detailed in a report by Bloomberg.<o:p></o:p>

The report further stated that, the latest data, showing the fastest job growth in six months, a drop in unemployment, and rising wages, has sent shockwaves through the bond market. Treasury yields surged, with investors scrambling to adjust their bets, abandoning the expectation of a half-point interest rate cut in the near future. The report has caused traders to rethink their positions, as concerns about an overheating economy are back in play.<o:p></o:p>

"The pain trade was always higher front-end rates due to fewer rate cuts being priced in," said George Catrambone, head of fixed income at DWS Americas. "Now, it’s possible the Fed will either pause rate cuts or even consider raising rates again."<o:p></o:p>

Previously, the debate focused on whether the economy would achieve a "soft landing"—where growth decelerates without causing a recession—or a "hard landing," where economic conditions deteriorate sharply.<o:p></o:p>

The Federal Reserve, after battling inflation for two years, shifted its attention to stabilizing the labor market, with a substantial 50-basis-point rate cut in September. However, the jobs report has renewed concerns about the appropriateness of rate cuts when the economy is growing steadily, stocks are at record highs, and inflation remains a threat.<o:p></o:p>

Prominent voices in finance, including Stanley Druckenmiller and Mohamed El-Erian, have cautioned the Fed against being too quick to cut rates, warning that inflation is not fully under control. Former Treasury Secretary Larry Summers echoed these concerns, describing both "no landing" and "hard landing" scenarios as potential risks. Tracy Chen, portfolio manager at Brandywine Global, also pointed out that China’s recent stimulus measures further reduce the likelihood of additional rate cuts.<o:p></o:p>

Inflation concerns have resurfaced, particularly with the recent surge in oil prices. Bond traders’ inflation expectations, measured by the 10-year breakeven rate, reached a two-month high. With key inflation data looming, traders and the Fed will be closely monitoring any signs of inflationary pressures. <o:p></o:p>

The market's recalibration comes as swap traders reduce their expectations for easing, now pricing in fewer rate cuts for the coming year. <o:p></o:p>

The US economy is witnessing a surprising shift as bond traders prepare for a "no landing" scenario a situation where economic growth continues, inflation reignites, and the Federal Reserve has little room to cut interest rates.

The US economy is witnessing a surprising shift as bond traders prepare for a "no landing" scenario a situation where economic growth continues, inflation reignites, and the Federal Reserve has little room to cut interest rates. Recent months saw discussions centered around slowing growth and potential rate cuts, but a blowout jobs report has disrupted that narrative as detailed in a report by Bloomberg. The report further stated that, the latest data, showing the fastest job growth in six months, a drop in unemployment, and rising wages, has sent shockwaves through the bond market. Treasury yields surged, with investors scrambling to adjust their bets, abandoning the expectation of a half-point interest rate cut in the near future. The report has caused traders to rethink their positions, as concerns about an overheating economy are back in play. "The pain trade was always higher front-end rates due to fewer rate cuts being priced in," said George Catrambone, head of fixed income at DWS Americas. "Now, it’s possible the Fed will either pause rate cuts or even consider raising rates again." Previously, the debate focused on whether the economy would achieve a "soft landing"—where growth decelerates without causing a recession—or a "hard landing," where economic conditions deteriorate sharply. The Federal Reserve, after battling inflation for two years, shifted its attention to stabilizing the labor market, with a substantial 50-basis-point rate cut in September. However, the jobs report has renewed concerns about the appropriateness of rate cuts when the economy is growing steadily, stocks are at record highs, and inflation remains a threat. Prominent voices in finance, including Stanley Druckenmiller and Mohamed El-Erian, have cautioned the Fed against being too quick to cut rates, warning that inflation is not fully under control. Former Treasury Secretary Larry Summers echoed these concerns, describing both "no landing" and "hard landing" scenarios as potential risks. Tracy Chen, portfolio manager at Brandywine Global, also pointed out that China’s recent stimulus measures further reduce the likelihood of additional rate cuts. Inflation concerns have resurfaced, particularly with the recent surge in oil prices. Bond traders’ inflation expectations, measured by the 10-year breakeven rate, reached a two-month high. With key inflation data looming, traders and the Fed will be closely monitoring any signs of inflationary pressures. The market's recalibration comes as swap traders reduce their expectations for easing, now pricing in fewer rate cuts for the coming year.

Bond traders brace for ‘No Landing’ scenario after jobs surge

As global markets experience an unprecedented rally, accumulating an astounding $8 trillion in value over recent months, analysts are closely monitoring the potential challenges that lie ahead. This surge has been driven by a combination of factors, including robust corporate earnings, easing inflation concerns, and a resilient consumer base. However, as optimism reigns, questions arise about the sustainability of this growth amid shifting economic conditions according to a detailed report by Bloomberg. <o:p></o:p>

Economic indicators and market performance<o:p></o:p>

The rally has been particularly pronounced in major indices, with the S&amp;P 500 and NASDAQ Composite posting significant gains. The S&amp;P 500 has risen approximately 19 per cent this year alone, while the NASDAQ has surged over 30 per cent. This performance can largely be attributed to strong earnings reports from technology giants and other key sectors. Companies such as Apple and Microsoft have exceeded expectations, contributing to investor confidence.<o:p></o:p>

But the tide may be turning as analysts slice their expectations for third-quarter results. Companies in the S&amp;P 500 are expected to report a 4.7 per cent increase in quarterly earnings from a year ago, according to data compiled by Bloomberg Intelligence. That’s down from projections of 7.9 per cent on July 12, and it would represent the weakest increase in four quarters, BI data show.<o:p></o:p>

Due to these factors, market experts caution that the rally may be tested by several factors. Managing interest rates remain a significant concern, as central banks worldwide signal potential measures to combat inflation. The Federal Reserve's recent comments suggest that while inflation is easing, it is not yet under control. This could lead to increased borrowing costs, which may dampen consumer spending and corporate investment.<o:p></o:p>

“The earnings season will be more important than normal this time,” said Adam Parker, founder of Trivariate Research. “We need concrete data from corporates.”<o:p></o:p>

Additionally, geopolitical tensions i.e., the Iran-Israel dispute and supply chain disruptions continue to pose risks to market stability. The ongoing conflict in Ukraine and trade tensions with China have created more uncertainties that could impact global trade and economic growth. Analysts are urging investors to remain vigilant as these external factors could influence market dynamics in the coming months.<o:p></o:p>

Investor sentiment and future outlook<o:p></o:p>

History appears to side with the pessimists, too. Since 1945, when the S&amp;P 500 gained 20 per cent through the first nine months of the year, it posted a down October 70 per cent of the time, data compiled by Bespoke Investment Research show. The index gained 21 per cent this year through September.<o:p></o:p>

Further, reports from major companies start arriving this week, with results from Delta Air Lines Inc. due Thursday and JPMorgan Chase &amp; Co. and Wells Fargo &amp; Co. scheduled for Friday.<o:p></o:p>

Bar has been lowered<o:p></o:p>

Still, there’s reason for optimism, specifically a lowered bar for earnings projections that leaves companies more room to beat expectations.<o:p></o:p>

“Estimates got a little bit too optimistic, and now they’re pulling back to more realistic levels,” said Ellen Hazen, chief market strategist at F.L.Putnam Investment Management. “It will definitely be easier to beat earnings because estimates are lower now.”<o:p></o:p>

Further it is to be noted that the Fed’s easing cycle, which has historically been a boon for US equities. Since 1971, the S&amp;P 500 has posted an annualized return of 15 per cent during periods in which the central bank cut rates, data compiled by Bloomberg Intelligence show.<o:p></o:p>

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As global markets experience an unprecedented rally, accumulating an astounding $8 trillion in value over recent months, analysts are closely monitoring the potential challenges that lie ahead.

As global markets experience an unprecedented rally, accumulating an astounding $8 trillion in value over recent months, analysts are closely monitoring the potential challenges that lie ahead. This surge has been driven by a combination of factors, including robust corporate earnings, easing inflation concerns, and a resilient consumer base. However, as optimism reigns, questions arise about the sustainability of this growth amid shifting economic conditions according to a detailed report by Bloomberg. Economic indicators and market performance The rally has been particularly pronounced in major indices, with the S&P 500 and NASDAQ Composite posting significant gains. The S&P 500 has risen approximately 19 per cent this year alone, while the NASDAQ has surged over 30 per cent. This performance can largely be attributed to strong earnings reports from technology giants and other key sectors. Companies such as Apple and Microsoft have exceeded expectations, contributing to investor confidence. But the tide may be turning as analysts slice their expectations for third-quarter results. Companies in the S&P 500 are expected to report a 4.7 per cent increase in quarterly earnings from a year ago, according to data compiled by Bloomberg Intelligence. That’s down from projections of 7.9 per cent on July 12, and it would represent the weakest increase in four quarters, BI data show. Due to these factors, market experts caution that the rally may be tested by several factors. Managing interest rates remain a significant concern, as central banks worldwide signal potential measures to combat inflation. The Federal Reserve's recent comments suggest that while inflation is easing, it is not yet under control. This could lead to increased borrowing costs, which may dampen consumer spending and corporate investment. “The earnings season will be more important than normal this time,” said Adam Parker, founder of Trivariate Research. “We need concrete data from corporates.” Additionally, geopolitical tensions i.e., the Iran-Israel dispute and supply chain disruptions continue to pose risks to market stability. The ongoing conflict in Ukraine and trade tensions with China have created more uncertainties that could impact global trade and economic growth. Analysts are urging investors to remain vigilant as these external factors could influence market dynamics in the coming months. Investor sentiment and future outlook History appears to side with the pessimists, too. Since 1945, when the S&P 500 gained 20 per cent through the first nine months of the year, it posted a down October 70 per cent of the time, data compiled by Bespoke Investment Research show. The index gained 21 per cent this year through September. Further, reports from major companies start arriving this week, with results from Delta Air Lines Inc. due Thursday and JPMorgan Chase & Co. and Wells Fargo & Co. scheduled for Friday. Bar has been lowered Still, there’s reason for optimism, specifically a lowered bar for earnings projections that leaves companies more room to beat expectations. “Estimates got a little bit too optimistic, and now they’re pulling back to more realistic levels,” said Ellen Hazen, chief market strategist at F.L.Putnam Investment Management. “It will definitely be easier to beat earnings because estimates are lower now.” Further it is to be noted that the Fed’s easing cycle, which has historically been a boon for US equities. Since 1971, the S&P 500 has posted an annualized return of 15 per cent during periods in which the central bank cut rates, data compiled by Bloomberg Intelligence show.

Global markets surge as $8 trillion rally faces key tests

In the coming week, new employment numbers are to be issued, and Jerome Powell is to speak to economists, which may bring the appetite of Federal Reserve policymakers for another large interest-rate cut in November into clearer view.

On Monday, the Fed chair will speak at the National Association for Business Economics conference to discuss the US economic outlook. At the end of the week, the September jobs report is expected to show a healthy, yet moderating, labour market.

Payrolls in the world’s largest economy are seen rising by 146,000, a median estimate from a Bloomberg survey of economists forecast. That's similar to the increase in August and would bring the three-month average job growth near its weakest level since mid-2019.

The unemployment rate probably remained steady at 4.2 per cent, while average hourly wages are projected to have risen by 3.8 per cent over the last 12 months.

The latest labour disruption hints that Friday's employment report may be the last good view of the US job market the Fed's policymakers will have before they meet in early November. Boeing Co. factory workers walked off their jobs in mid-September, and Atlantic and Gulf Coast dockworkers announced plans to strike starting Oct. 1.

Along with the main monthly payrolls report, job openings data on Tuesday are expected to indicate that the vacancies for August declined and stayed near their lowest level since early 2021. Economists will also look at the quit rate and layoffs to check how much cooling has occurred in labour demand.

Industry surveys will shed more light on the jobs market from the private sector. The Institute for Supply Management is scheduled to post its September manufacturing survey on Tuesday and services index two days later, each containing employment metrics.

In the coming week, new employment numbers are to be issued, and Jerome Powell is to speak to economists, which may bring the appetite of Federal Reserve policymakers for another large interest-rate cut in November into clearer view.

In the coming week, new employment numbers are to be issued, and Jerome Powell is to speak to economists, which may bring the appetite of Federal Reserve policymakers for another large interest-rate cut in November into clearer view. On Monday, the Fed chair will speak at the National Association for Business Economics conference to discuss the US economic outlook. At the end of the week, the September jobs report is expected to show a healthy, yet moderating, labour market. Payrolls in the world’s largest economy are seen rising by 146,000, a median estimate from a Bloomberg survey of economists forecast. That's similar to the increase in August and would bring the three-month average job growth near its weakest level since mid-2019. The unemployment rate probably remained steady at 4.2 per cent, while average hourly wages are projected to have risen by 3.8 per cent over the last 12 months. The latest labour disruption hints that Friday's employment report may be the last good view of the US job market the Fed's policymakers will have before they meet in early November. Boeing Co. factory workers walked off their jobs in mid-September, and Atlantic and Gulf Coast dockworkers announced plans to strike starting Oct. 1. Along with the main monthly payrolls report, job openings data on Tuesday are expected to indicate that the vacancies for August declined and stayed near their lowest level since early 2021. Economists will also look at the quit rate and layoffs to check how much cooling has occurred in labour demand. Industry surveys will shed more light on the jobs market from the private sector. The Institute for Supply Management is scheduled to post its September manufacturing survey on Tuesday and services index two days later, each containing employment metrics.

Powell’s speech and jobs data expected to clarify Fed's rate direction

South Korea's Finance Minister Choi Sang-mok said that in the short term, the policy priority was not more on rising household debt but more focused on taming slowing domestic demand.

"As the deputy prime minister for economic affairs, I think the recovery of domestic demand is a little more important in the short term," said Choi, as he answered a question about policy priorities at a discussion forum.

The minister said that he expected the Bank of Korea to make a wise decision after the US Federal Reserve's recent interest rate cut.

The US central bank last week opened an expected string of interest rate cuts with a more-than-expected half-percentage-point reduction that Federal Reserve Chair Jerome Powell said was part of policymakers' efforts to show they can preserve a low unemployment rate given the recent easing of inflation.

The Bank of Korea kept interest rates steady at 3.50 per cent last month, the highest since late 2008, as board members were fearful of accelerating house prices and debt for households regardless of easing inflation and slowing domestic demand.

South Korea's house prices accelerated in August, with prices in the capital, Seoul, rising at the fastest rate in more than 4-1/2 years, even after a government policy package to boost supply in the real estate market.

Choi said efforts to calm the housing market will continue through sufficient supply, and new measures to stabilise construction firms' input costs will be announced soon.

South Korea's economic growth will be at a level around mid-2 per cent in 2024 and above its growth potential, Choi said.

Economic growth will be driven by robust exports, according to Choi, while the recovery of domestic demand was comparatively sluggish.

South Korea's Finance Minister Choi Sang-mok said that in the short term, the policy priority was not more on rising household debt but more focused on taming slowing domestic demand.

South Korea's Finance Minister Choi Sang-mok said that in the short term, the policy priority was not more on rising household debt but more focused on taming slowing domestic demand. "As the deputy prime minister for economic affairs, I think the recovery of domestic demand is a little more important in the short term," said Choi, as he answered a question about policy priorities at a discussion forum. The minister said that he expected the Bank of Korea to make a wise decision after the US Federal Reserve's recent interest rate cut. The US central bank last week opened an expected string of interest rate cuts with a more-than-expected half-percentage-point reduction that Federal Reserve Chair Jerome Powell said was part of policymakers' efforts to show they can preserve a low unemployment rate given the recent easing of inflation. The Bank of Korea kept interest rates steady at 3.50 per cent last month, the highest since late 2008, as board members were fearful of accelerating house prices and debt for households regardless of easing inflation and slowing domestic demand. South Korea's house prices accelerated in August, with prices in the capital, Seoul, rising at the fastest rate in more than 4-1/2 years, even after a government policy package to boost supply in the real estate market. Choi said efforts to calm the housing market will continue through sufficient supply, and new measures to stabilise construction firms' input costs will be announced soon. South Korea's economic growth will be at a level around mid-2 per cent in 2024 and above its growth potential, Choi said. Economic growth will be driven by robust exports, according to Choi, while the recovery of domestic demand was comparatively sluggish.

South Korea's finance minister emphasises demand recovery over rising household debt

The recent decision by the Federal Reserve to cut interest rates by 50 basis points has generated a wave of optimism regarding the US economy's trajectory. Goldman Sachs’ Chief Financial Officer, Denis Coleman, believes this significant reduction positions the economy well for a soft landing, despite uncertainties among market analysts about its potential effects on inflation and recession risks as detailed by CNBC in a report.

In a move that surprised some economists, the Federal Open Market Committee (FOMC) voted to lower its key overnight borrowing rate to a target range of 4.75 per cent to 5 per cent. This marks the first substantial cut since the onset of the COVID-19 pandemic and is seen as a pivotal moment in monetary policy since the financial crisis of 2008. The rates were reduced by 50 basis points on September 18.

Coleman shared his insights in an interview with CNBC, stating, "This initial 50 basis point reduction is a definitive indication of a new course. I hope it fosters additional confidence and reduces capital costs, potentially leading to strategic activities as we approach the year's end." He expressed optimism that this rate cut could stimulate economic activity, particularly as businesses work through backlogs and prepare for increased market engagement in 2025.

Some experts remain cautious<o:p></o:p>

Despite this positive outlook, some experts remain cautious about the long-term resilience of the US economy. Historical precedents reveal that previous significant rate cuts have not always succeeded in preventing recessions, notably during the early 2000s and the global financial crisis. Analysts are now closely monitoring whether this latest reduction will effectively manage inflation without triggering an economic downturn.

Coleman acknowledged these concerns but maintained a hopeful perspective regarding the current economic landscape. "Currently, that appears to be the consensus," he noted when discussing the potential for a soft landing. He pointed out that inflation rates are on a downward trend and unemployment levels remain manageable. The Fed's proactive approach to rate cuts is seen as a strategic effort to navigate these economic transitions successfully.

However, not all financial leaders share Coleman's optimism. Jamie Dimon, CEO of JPMorgan Chase, expressed a more cautious stance regarding the economic outlook. His comments highlight the ongoing debate among industry experts about the implications of monetary policy changes and their effectiveness in stabilising the economy.

As businesses and consumers adjust to this new interest rate environment, many are left wondering how these changes will impact spending and investment decisions moving forward. The Fed’s actions are intended to instill confidence in both markets and consumers, fostering an environment conducive to growth while managing inflationary pressures.

Hence, while Goldman Sachs’ CFO Denis Coleman champions the recent rate cut as a step towards a soft landing for the US economy, skepticism remains among some analysts who recall past economic challenges linked to similar monetary policy decisions.

As we move into 2025, all eyes will be on how these developments unfold and what they mean for American businesses and consumers alike. The balance between stimulating growth and controlling inflation will be crucial in determining whether this optimistic outlook can be realised or if caution will prevail in the months ahead.

The recent decision by the Federal Reserve to cut interest rates by 50 basis points has generated a wave of optimism regarding the US economy's trajectory. Goldman Sachs’ Chief Financial Officer, Denis Coleman, believes this significant reduction positions the economy well for a soft landing, despite uncertainties among market analysts about its potential effects on inflation and recession risks as detailed by CNBC in a report.

The recent decision by the Federal Reserve to cut interest rates by 50 basis points has generated a wave of optimism regarding the US economy's trajectory. Goldman Sachs’ Chief Financial Officer, Denis Coleman, believes this significant reduction positions the economy well for a soft landing, despite uncertainties among market analysts about its potential effects on inflation and recession risks as detailed by CNBC in a report. In a move that surprised some economists, the Federal Open Market Committee (FOMC) voted to lower its key overnight borrowing rate to a target range of 4.75 per cent to 5 per cent. This marks the first substantial cut since the onset of the COVID-19 pandemic and is seen as a pivotal moment in monetary policy since the financial crisis of 2008. The rates were reduced by 50 basis points on September 18. Coleman shared his insights in an interview with CNBC, stating, "This initial 50 basis point reduction is a definitive indication of a new course. I hope it fosters additional confidence and reduces capital costs, potentially leading to strategic activities as we approach the year's end." He expressed optimism that this rate cut could stimulate economic activity, particularly as businesses work through backlogs and prepare for increased market engagement in 2025. Some experts remain cautious Despite this positive outlook, some experts remain cautious about the long-term resilience of the US economy. Historical precedents reveal that previous significant rate cuts have not always succeeded in preventing recessions, notably during the early 2000s and the global financial crisis. Analysts are now closely monitoring whether this latest reduction will effectively manage inflation without triggering an economic downturn. Coleman acknowledged these concerns but maintained a hopeful perspective regarding the current economic landscape. "Currently, that appears to be the consensus," he noted when discussing the potential for a soft landing. He pointed out that inflation rates are on a downward trend and unemployment levels remain manageable. The Fed's proactive approach to rate cuts is seen as a strategic effort to navigate these economic transitions successfully. However, not all financial leaders share Coleman's optimism. Jamie Dimon, CEO of JPMorgan Chase, expressed a more cautious stance regarding the economic outlook. His comments highlight the ongoing debate among industry experts about the implications of monetary policy changes and their effectiveness in stabilising the economy. As businesses and consumers adjust to this new interest rate environment, many are left wondering how these changes will impact spending and investment decisions moving forward. The Fed’s actions are intended to instill confidence in both markets and consumers, fostering an environment conducive to growth while managing inflationary pressures. Hence, while Goldman Sachs’ CFO Denis Coleman champions the recent rate cut as a step towards a soft landing for the US economy, skepticism remains among some analysts who recall past economic challenges linked to similar monetary policy decisions. As we move into 2025, all eyes will be on how these developments unfold and what they mean for American businesses and consumers alike. The balance between stimulating growth and controlling inflation will be crucial in determining whether this optimistic outlook can be realised or if caution will prevail in the months ahead.

Fed's jumbo rate cut sparks optimism for US economic soft landing, says Goldman CFO

Donald Trump, the Republican presidential candidate, described the move by the Federal Reserve to cut its benchmark interest rate by half a percentage point as a " political move," and said it would have been better if the move had been smaller, according to a report by Bloomberg.

“It really is a political move. Most people thought it was going to be half of that number, which probably would have been the right thing to do,” Trump said in an interview with Newsmax on Thursday. “So it’s a political move to try and keep somebody in office, but it’s not gonna work, because the inflation has been so bad.”

The former president appeared to then level criticism at Fed Chairman Jerome Powell, saying he "missed the inflation."

“They missed it. They missed the number. They’re either too early or too late. Now they’re too early. Before they were too late. But inflation is already done,” Trump said.

The half-point cut was the Fed's first rate reduction in more than four years and came after holding rates at their highest level in two decades for more than a year.

Trump has often criticised the central bank and has said he believes that presidents should be involved in a greater capacity in determining the Fed's interest-rate decisions. That represents a direct contradiction of long-standing efforts to remove politics from such decisions to the extent possible. He also suggested not reappointing Powell as Fed chief.

His comments came after earlier Thursday when President Joe Biden said the rate reduction was "an important signal" that inflation had moderated.

“Lowering interest rates isn’t a declaration of victory,” Biden told the Economic Club of Washington, DC. “It’s a declaration of progress, to signal we’ve entered a new phase of our economy and our recovery.”

Donald Trump, the Republican presidential candidate, described the move by the Federal Reserve to cut its benchmark interest rate by half a percentage point as a " political move," and said it would have been better if the move had been smaller, according to a report by Bloomberg.

Donald Trump, the Republican presidential candidate, described the move by the Federal Reserve to cut its benchmark interest rate by half a percentage point as a " political move," and said it would have been better if the move had been smaller, according to a report by Bloomberg. “It really is a political move. Most people thought it was going to be half of that number, which probably would have been the right thing to do,” Trump said in an interview with Newsmax on Thursday. “So it’s a political move to try and keep somebody in office, but it’s not gonna work, because the inflation has been so bad.” The former president appeared to then level criticism at Fed Chairman Jerome Powell, saying he "missed the inflation." “They missed it. They missed the number. They’re either too early or too late. Now they’re too early. Before they were too late. But inflation is already done,” Trump said. The half-point cut was the Fed's first rate reduction in more than four years and came after holding rates at their highest level in two decades for more than a year. Trump has often criticised the central bank and has said he believes that presidents should be involved in a greater capacity in determining the Fed's interest-rate decisions. That represents a direct contradiction of long-standing efforts to remove politics from such decisions to the extent possible. He also suggested not reappointing Powell as Fed chief. His comments came after earlier Thursday when President Joe Biden said the rate reduction was "an important signal" that inflation had moderated. “Lowering interest rates isn’t a declaration of victory,” Biden told the Economic Club of Washington, DC. “It’s a declaration of progress, to signal we’ve entered a new phase of our economy and our recovery.”

Trump condemns Fed rate cut as a ‘political move’ destined to fail

As the Federal Reserve navigates a complicated economic landscape, it has embarked on a significant recalibration of its monetary policy. This shift, articulated by Fed Chair Jerome Powell, is designed to address ongoing challenges such as inflation and economic growth. In a recently concluded Federal Open Market Committee (FOMC) meeting, Powell introduced the term "recalibration," signaling a careful approach to managing interest rates and monetary supply as detailed in a report by CNBC. <o:p></o:p>

The Fed's recalibration comes at a time when the US consumer price index (CPI) have slowed to 2.5 per cent in August from a year ago, down from 2.9 per cent in July and the lowest annual figure since February 2021, the Labor Department's Bureau of Labor Statistics stated on September 11.&nbsp;The central bank's objective is to maintain price stability while fostering sustainable economic growth, which necessitates a careful balance in its policy decisions.<o:p></o:p>

Powell emphasized that the Fed is not solely focused on raising interest rates but is instead adopting a more flexible stance. "We are looking at a range of factors," he stated, highlighting the importance of data-driven decision-making in setting future policy directions. This approach reflects an understanding that aggressive rate hikes could hamper economic recovery and negatively impact employment rates.<o:p></o:p>

The implications of this recalibration are significant for various sectors of the US economy. For consumers, a more measured approach to interest rate adjustments could mean more stable mortgage rates and borrowing costs. Businesses may also benefit from improved access to credit, allowing for continued investment and expansion.<o:p></o:p>

Furthermore, the Fed's strategy aims to reassure financial markets that it is committed to controlling inflation without derailing economic growth. By communicating its intentions clearly, the central bank hopes to foster confidence among investors and consumers alike. This transparency is crucial in an environment where market volatility can be worsened by uncertainty regarding monetary policy.<o:p></o:p>

In addition to addressing inflation, Powell noted that the Fed is also monitoring global economic conditions closely. Factors such as geopolitical tensions and supply chain disruptions can have far-reaching effects on domestic economic stability. As such, the recalibration of policy will take into account not only local data but also international developments that could impact the US economy.<o:p></o:p>

Looking ahead, analysts suggest that the Fed's recalibration may lead to a prolonged period of steady interest rates rather than aggressive hikes or cuts. This could create a more predictable environment for both consumers and businesses, allowing them to plan for the future with greater certainty.

Hence, as the Federal Reserve continues its efforts to navigate these complex challenges, the concept of recalibration will likely remain at the forefront of discussions surrounding monetary policy. By prioritising flexibility and data-driven decision-making, Powell and his team aim to strike a balance that supports economic growth while keeping inflation in check.<o:p></o:p>

<o:p>&nbsp;</o:p>

As the Federal Reserve navigates a complicated economic landscape, it has embarked on a significant recalibration of its monetary policy. This shift, articulated by Fed Chair Jerome Powell, is designed to address ongoing challenges such as inflation and economic growth.

As the Federal Reserve navigates a complicated economic landscape, it has embarked on a significant recalibration of its monetary policy. This shift, articulated by Fed Chair Jerome Powell, is designed to address ongoing challenges such as inflation and economic growth. In a recently concluded Federal Open Market Committee (FOMC) meeting, Powell introduced the term "recalibration," signaling a careful approach to managing interest rates and monetary supply as detailed in a report by CNBC. The Fed's recalibration comes at a time when the US consumer price index (CPI) have slowed to 2.5 per cent in August from a year ago, down from 2.9 per cent in July and the lowest annual figure since February 2021, the Labor Department's Bureau of Labor Statistics stated on September 11. The central bank's objective is to maintain price stability while fostering sustainable economic growth, which necessitates a careful balance in its policy decisions. Powell emphasized that the Fed is not solely focused on raising interest rates but is instead adopting a more flexible stance. "We are looking at a range of factors," he stated, highlighting the importance of data-driven decision-making in setting future policy directions. This approach reflects an understanding that aggressive rate hikes could hamper economic recovery and negatively impact employment rates. The implications of this recalibration are significant for various sectors of the US economy. For consumers, a more measured approach to interest rate adjustments could mean more stable mortgage rates and borrowing costs. Businesses may also benefit from improved access to credit, allowing for continued investment and expansion. Furthermore, the Fed's strategy aims to reassure financial markets that it is committed to controlling inflation without derailing economic growth. By communicating its intentions clearly, the central bank hopes to foster confidence among investors and consumers alike. This transparency is crucial in an environment where market volatility can be worsened by uncertainty regarding monetary policy. In addition to addressing inflation, Powell noted that the Fed is also monitoring global economic conditions closely. Factors such as geopolitical tensions and supply chain disruptions can have far-reaching effects on domestic economic stability. As such, the recalibration of policy will take into account not only local data but also international developments that could impact the US economy. Looking ahead, analysts suggest that the Fed's recalibration may lead to a prolonged period of steady interest rates rather than aggressive hikes or cuts. This could create a more predictable environment for both consumers and businesses, allowing them to plan for the future with greater certainty. Hence, as the Federal Reserve continues its efforts to navigate these complex challenges, the concept of recalibration will likely remain at the forefront of discussions surrounding monetary policy. By prioritising flexibility and data-driven decision-making, Powell and his team aim to strike a balance that supports economic growth while keeping inflation in check.

The Fed's new strategy: Understanding the "Recalibration" of monetary policy

The Federal Reserve projects interest rates cut by another half point before the end of 2024, offering two policy meetings to make the move. The spotlight now shifts towards the future course of action by the US Fed after the most recent 50 basis point reduction in the September 18 Federal Open Market Committee meeting according to a report by CNBC. 

“There’s nothing in the SEP (Summary of Economic Projections) that suggests the committee is in a rush to get this done,” Fed Chairman Jerome Powell said in a news conference. “This process evolves over time.”

What will be the trajectory of the federal funds rate going ahead?

The 'dot plot' put out by the Fed showed that 19 of the FOMC's members, both voting and non-voting members, anticipate that the benchmark federal funds rate will top 4.9 per cent by year-end. The target band goes as high as 4.25 per cent to 4.5 per cent. The remaining meetings for this year are November 6-7 and December 17-18.

Looking ahead to 2025, it predicts interest rates will settle at 3.4 per cent, meaning yet another full-point cut. Then, by 2026, the rate is expected to decline even further to 2.9 per cent, which would be another half-point cut.

Brief history of the Federal Reserve and its role

The Federal Reserve System or the Fed is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of financial panics (particularly the panic of 1907) led to the desire for central control of the monetary system to alleviate financial crises. The goal of the Federal Reserve is to balance inflation and growth in the US.

Further, over the years, events such as the Great Depression in the 1930s and the Great Recession during the 2000s have led to the expansion of the roles and responsibilities of the Federal Reserve System.

What did the Fed do on Wednesday?<o:p></o:p>

On Wednesday, it lowered its first rate cut since the onset of the Covid19 pandemic as it trimmed the federal funds rate by 50 basis points, to a range of 4.75 percent to 5 percent.

Moreover, Fed officials adjusted their forecast of this year's unemployment rate to 4.4 per cent, against an earlier estimate of 4 per cent in June. This reflects continued economic hurdles and evidence of a conservative mindset regarding the dynamics of recovery after the pandemic.

The cut in interest rates is likely to make a huge difference both for consumers and businesses alike. Lower borrowing costs could have an immediate positive effect on spending and investment, thus boosting growth into 2025. Policymakers are also concerned about increased inflation and unemployment levels as they move forward with these steps.

The Fed's experience with this new trend of change in strategy i.e., reduction of rates, after four years, will continue to shape according to the changing economic conditions. Therefore, the focus of market participants shifts towards the upcoming policy meetings of the Federal Reserve.

The Federal Reserve projects interest rates cut by another half point before the end of 2024, offering two policy meetings to make the move. The spotlight now shifts towards the future course of action by the US Fed after the most recent 50 basis point reduction in the September 18 Federal Open Market Committee meeting according to a report by CNBC.

The Federal Reserve projects interest rates cut by another half point before the end of 2024, offering two policy meetings to make the move. The spotlight now shifts towards the future course of action by the US Fed after the most recent 50 basis point reduction in the September 18 Federal Open Market Committee meeting according to a report by CNBC. “There’s nothing in the SEP (Summary of Economic Projections) that suggests the committee is in a rush to get this done,” Fed Chairman Jerome Powell said in a news conference. “This process evolves over time.” What will be the trajectory of the federal funds rate going ahead? The 'dot plot' put out by the Fed showed that 19 of the FOMC's members, both voting and non-voting members, anticipate that the benchmark federal funds rate will top 4.9 per cent by year-end. The target band goes as high as 4.25 per cent to 4.5 per cent. The remaining meetings for this year are November 6-7 and December 17-18. Looking ahead to 2025, it predicts interest rates will settle at 3.4 per cent, meaning yet another full-point cut. Then, by 2026, the rate is expected to decline even further to 2.9 per cent, which would be another half-point cut. Brief history of the Federal Reserve and its role The Federal Reserve System or the Fed is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of financial panics (particularly the panic of 1907) led to the desire for central control of the monetary system to alleviate financial crises. The goal of the Federal Reserve is to balance inflation and growth in the US. Further, over the years, events such as the Great Depression in the 1930s and the Great Recession during the 2000s have led to the expansion of the roles and responsibilities of the Federal Reserve System. What did the Fed do on Wednesday? On Wednesday, it lowered its first rate cut since the onset of the Covid19 pandemic as it trimmed the federal funds rate by 50 basis points, to a range of 4.75 percent to 5 percent. Moreover, Fed officials adjusted their forecast of this year's unemployment rate to 4.4 per cent, against an earlier estimate of 4 per cent in June. This reflects continued economic hurdles and evidence of a conservative mindset regarding the dynamics of recovery after the pandemic. The cut in interest rates is likely to make a huge difference both for consumers and businesses alike. Lower borrowing costs could have an immediate positive effect on spending and investment, thus boosting growth into 2025. Policymakers are also concerned about increased inflation and unemployment levels as they move forward with these steps. The Fed's experience with this new trend of change in strategy i.e., reduction of rates, after four years, will continue to shape according to the changing economic conditions. Therefore, the focus of market participants shifts towards the upcoming policy meetings of the Federal Reserve.

Federal Reserve expected to slash interest rates by another 50 basis points by year-end

The Federal Reserve has taken a significant step in its monetary policy by cutting interest rates by half a percentage point, marking its first reduction since the onset of the Covid pandemic. This decision, made on Wednesday, aims to mitigate potential downturns in the labor market while responding to easing inflationary pressures as detailed in a report by CNBC.

In a move that aligns with recent market forecasts, the Federal Open Market Committee (FOMC) reduced the benchmark federal funds rate to a range of 4.75 per cent to 5 per cent. This marks a notable shift from the emergency rate cuts implemented during the pandemic, with the last half-point cut occurring in 2008 during the global financial crisis.

"The Committee has gained greater confidence that inflation is moving sustainably toward 2 per cent, and judges that the risks to achieving its employment and inflation goals are roughly in balance," the Federal Reserve statement said.

The FOMC's decision comes amid signs of easing in both employment data and inflation. The committee's post-meeting statement indicated that it has gained confidence in achieving its employment and inflation goals, despite ongoing concerns about the labor market. Further, the vote to lower rates was not unanimous; Governor Michelle Bowman advocated for a more conservative quarter-point reduction.

Economic indicators have shown mixed signals, with the unemployment rate projected to rise to 4.4 per cent this year, up from an earlier estimate of 4 per cent. Concurrently, the inflation forecast has been adjusted downwards from 2.6 per cent to 2.3 per cent, reflecting a cautious approach by the Fed in navigating these economic challenges.

What does the Fed 'dot plot' suggest?

The FOMC's 'dot plot' suggests that additional cuts could be on the horizon, with another potential reduction of 50 basis points expected by year-end. Overall, projections indicate a total reduction of one full percentage point by the end of 2025, with an additional half-point decrease anticipated in 2026.

Despite these adjustments, concerns about the labor market persist. While layoffs have not surged dramatically, hiring has slowed significantly, with recent monthly hiring rates dropping to levels not seen since unemployment rates exceeded 6 per cent. Chair Jerome Powell and other officials have voiced worries about this trend, indicating that vigilance is required as economic conditions evolve.

Investor sentiment leading up to the meeting fluctuated considerably, with expectations for a half-point cut rising to 63 per cent according to CME Group's FedWatch tool. This decision is likely to have broader implications for global monetary policy as central banks in the United Kingdom, Europe, and Canada have also begun reducing rates in response to similar economic pressures.

The Fed's current approach reflects its ongoing struggle to balance economic growth with inflation control. While gross domestic product continues to grow projected at approximately 3 per cent for the third quarter, many indicators suggest that inflation remains above-desired levels. The Fed's preferred measure indicates inflation at around 2.5 per cent, still higher than its target of 2 per cent.

As part of its strategy, the Federal Reserve is also maintaining a program aimed at gradually reducing its bond holdings through quantitative tightening. This process has decreased its balance sheet to $7.2 trillion, down approximately $1 trillion from its peak.

Hence, Wednesday's decision marks a pivotal moment for the Federal Reserve as it embarks on an easing campaign amidst economic uncertainty. With potential further cuts on the horizon and ongoing assessments of labor market dynamics, all eyes will be on how these changes influence both domestic and global economic landscapes in the coming months.

What is the way forward for the Reserve Bank of India?

According to a report by Emkay Global titled "Fed kicks off with a bang, but pace to moderate", released on September 19, the prominent brokerage firm believes that this cut by the Federal Reserve will give room for the emerging markets in Asia to take informed and calculated calls for their easing cycles, "This outsized cut has given emerging markets in&nbsp;Asia room to proceed with their own easing cycles, with the Bank of Indonesia delivering a 25bps cut earlier in the day. With the global market reaction having been muted thus far, the RBI still has the flexibility to remain focused on domestic inflation and risk management, albeit there are over 20 days before its next MPC meeting. The RBI is likely to maintain its wait-and-watch stance and focus on being ‘actively disinflationary’, with a first-rate cut likely by December. A case for an early cut is still less likely, and we continue to see shallow cuts by both the Fed and the RBI in this cycle."&nbsp;&nbsp;

The Federal Reserve has taken a significant step in its monetary policy by cutting interest rates by half a percentage point, marking its first reduction since the onset of the Covid pandemic.

The Federal Reserve has taken a significant step in its monetary policy by cutting interest rates by half a percentage point, marking its first reduction since the onset of the Covid pandemic. This decision, made on Wednesday, aims to mitigate potential downturns in the labor market while responding to easing inflationary pressures as detailed in a report by CNBC. In a move that aligns with recent market forecasts, the Federal Open Market Committee (FOMC) reduced the benchmark federal funds rate to a range of 4.75 per cent to 5 per cent. This marks a notable shift from the emergency rate cuts implemented during the pandemic, with the last half-point cut occurring in 2008 during the global financial crisis. "The Committee has gained greater confidence that inflation is moving sustainably toward 2 per cent, and judges that the risks to achieving its employment and inflation goals are roughly in balance," the Federal Reserve statement said. The FOMC's decision comes amid signs of easing in both employment data and inflation. The committee's post-meeting statement indicated that it has gained confidence in achieving its employment and inflation goals, despite ongoing concerns about the labor market. Further, the vote to lower rates was not unanimous; Governor Michelle Bowman advocated for a more conservative quarter-point reduction. Economic indicators have shown mixed signals, with the unemployment rate projected to rise to 4.4 per cent this year, up from an earlier estimate of 4 per cent. Concurrently, the inflation forecast has been adjusted downwards from 2.6 per cent to 2.3 per cent, reflecting a cautious approach by the Fed in navigating these economic challenges. What does the Fed 'dot plot' suggest? The FOMC's 'dot plot' suggests that additional cuts could be on the horizon, with another potential reduction of 50 basis points expected by year-end. Overall, projections indicate a total reduction of one full percentage point by the end of 2025, with an additional half-point decrease anticipated in 2026. Despite these adjustments, concerns about the labor market persist. While layoffs have not surged dramatically, hiring has slowed significantly, with recent monthly hiring rates dropping to levels not seen since unemployment rates exceeded 6 per cent. Chair Jerome Powell and other officials have voiced worries about this trend, indicating that vigilance is required as economic conditions evolve. Investor sentiment leading up to the meeting fluctuated considerably, with expectations for a half-point cut rising to 63 per cent according to CME Group's FedWatch tool. This decision is likely to have broader implications for global monetary policy as central banks in the United Kingdom, Europe, and Canada have also begun reducing rates in response to similar economic pressures. The Fed's current approach reflects its ongoing struggle to balance economic growth with inflation control. While gross domestic product continues to grow projected at approximately 3 per cent for the third quarter, many indicators suggest that inflation remains above-desired levels. The Fed's preferred measure indicates inflation at around 2.5 per cent, still higher than its target of 2 per cent. As part of its strategy, the Federal Reserve is also maintaining a program aimed at gradually reducing its bond holdings through quantitative tightening. This process has decreased its balance sheet to $7.2 trillion, down approximately $1 trillion from its peak. Hence, Wednesday's decision marks a pivotal moment for the Federal Reserve as it embarks on an easing campaign amidst economic uncertainty. With potential further cuts on the horizon and ongoing assessments of labor market dynamics, all eyes will be on how these changes influence both domestic and global economic landscapes in the coming months. What is the way forward for the Reserve Bank of India? According to a report by Emkay Global titled "Fed kicks off with a bang, but pace to moderate", released on September 19, the prominent brokerage firm believes that this cut by the Federal Reserve will give room for the emerging markets in Asia to take informed and calculated calls for their easing cycles, "This outsized cut has given emerging markets in Asia room to proceed with their own easing cycles, with the Bank of Indonesia delivering a 25bps cut earlier in the day. With the global market reaction having been muted thus far, the RBI still has the flexibility to remain focused on domestic inflation and risk management, albeit there are over 20 days before its next MPC meeting. The RBI is likely to maintain its wait-and-watch stance and focus on being ‘actively disinflationary’, with a first-rate cut likely by December. A case for an early cut is still less likely, and we continue to see shallow cuts by both the Fed and the RBI in this cycle."

Fed cuts interest rates by half a point, initiating easing campaign amid economic concerns

Fed Chair Jerome Powell said on Wednesday that the US central bank may have started to cut interest rates in late July had it realised that the labour market was cooling this quickly.

"If you ask, you know, if we'd gotten the July report before the meeting, would we have cut? We might well have," Powell told a news conference after the central bank cut its benchmark overnight interest rate by 50 basis points, more than most analysts had expected. "We didn't make that decision, but you know, we might well have."

Powell said the policy decision unveiled by the Fed on Wednesday doesn't mean it is behind the curve; it's a commitment not to be.

The Labor Department's jobs report for July, out days after the Fed's July 30-31 meeting, showed the unemployment rate had risen to 4.3 per cent and job growth had slowed.

Although the report for August that followed showed unemployment ticking down 4.2 per cent, it was abundant with further proof of deceleration.

"It seems like the Fed wanted to catch up from not going in July," Oscar Munoz, an economist at TD Securities, said after the release of the latest policy decision.

From here, Munoz said, the Fed is in no rush, a point that Powell also made in his post-meeting news conference.

Fed policymakers are nearly evenly split on whether they feel they will need to deliver another 50 basis points of rate cuts over the last two meetings of the year, or should stick to less.

To date, said Powell, the labour market is strong and inflation is on track to move down to 2 percent. Wednesday's rate cut is an attempt to keep it that way.

"The Fed doesn't like to admit policy errors, but some of the decision for a larger initial cut is likely to get caught up as it found itself behind the curve by one meeting," said Ryan Sweet, chief U.S. economist at Oxford Economics. "The September decision is a preemptive strike to increase the odds that the central bank can pull off a 'soft landing.'

Fed Chair Jerome Powell said on Wednesday that the US central bank may have started to cut interest rates in late July had it realised that the labour market was cooling this quickly.

Fed Chair Jerome Powell said on Wednesday that the US central bank may have started to cut interest rates in late July had it realised that the labour market was cooling this quickly. "If you ask, you know, if we'd gotten the July report before the meeting, would we have cut? We might well have," Powell told a news conference after the central bank cut its benchmark overnight interest rate by 50 basis points, more than most analysts had expected. "We didn't make that decision, but you know, we might well have." Powell said the policy decision unveiled by the Fed on Wednesday doesn't mean it is behind the curve; it's a commitment not to be. The Labor Department's jobs report for July, out days after the Fed's July 30-31 meeting, showed the unemployment rate had risen to 4.3 per cent and job growth had slowed. Although the report for August that followed showed unemployment ticking down 4.2 per cent, it was abundant with further proof of deceleration. "It seems like the Fed wanted to catch up from not going in July," Oscar Munoz, an economist at TD Securities, said after the release of the latest policy decision. From here, Munoz said, the Fed is in no rush, a point that Powell also made in his post-meeting news conference. Fed policymakers are nearly evenly split on whether they feel they will need to deliver another 50 basis points of rate cuts over the last two meetings of the year, or should stick to less. To date, said Powell, the labour market is strong and inflation is on track to move down to 2 percent. Wednesday's rate cut is an attempt to keep it that way. "The Fed doesn't like to admit policy errors, but some of the decision for a larger initial cut is likely to get caught up as it found itself behind the curve by one meeting," said Ryan Sweet, chief U.S. economist at Oxford Economics. "The September decision is a preemptive strike to increase the odds that the central bank can pull off a 'soft landing.'

Powell suggests Fed could have cut rates at July meeting

As inflation shows signs of slowing, the Federal Reserve faces a complex decision-making landscape regarding its future monetary policies. Recent data indicates that inflation has decreased, with the annual rate dropping to 3.7 per cent in August, down from 3.8 per cent in July. This marks a significant shift from the peak inflation rate of 9.1 per cent recorded by the US economy in June 2022, providing a glimmer of hope for consumers and policymakers alike as detailed in a CNBC report.

Despite this positive trend, the Federal Reserve remains cautious. The latest consumer price index (CPI) report reveals that while inflation is easing, core inflation, excluding volatile food and energy prices, rose by 4.3 per cent year-on-year. This persistent core inflation poses a challenge for the Fed as it weighs the implications of further interest rate adjustments.

The Federal Reserve's recent actions, including a pause in rate hikes during its September meeting, reflect a careful balancing act. While the central bank has raised interest rates aggressively over the past year to combat inflation, the potential for economic slowdown looms large. Many economists anticipate that the Fed may opt for a "higher for longer" approach, keeping interest rates elevated to ensure inflation continues to decline.

The impact of these decisions extends beyond monetary policy. Consumers are already feeling the effects of rising prices on everyday goods and services. The latest CPI report indicates that food prices have increased by 3.6 per cent year-on-year, while energy prices have surged by 5.6 per cent. These rising costs are straining household budgets, leading to increased scrutiny of the Fed's actions.

Moreover, the uncertainty surrounding the Fed's next moves is further complicated by geopolitical factors and global economic conditions. The ongoing conflict in Ukraine and supply chain disruptions continue to exert pressure on prices. As the Fed navigates this challenging environment, market analysts are closely monitoring signals that could indicate the central bank's next steps.

In the face of these developments, consumers are left wondering how the Fed's decisions will affect their financial well-being. With interest rates already at their highest levels in over two decades, borrowing costs for mortgages, car loans, and credit cards are likely to remain elevated. This could lead to a slowdown in consumer spending, which is a critical driver of economic growth.

As the Federal Reserve prepares for its next meeting, the stakes are high. A misstep could have far-reaching consequences for the US economy, impacting everything from inflation rates to employment levels. The central bank's commitment to achieving its inflation target of 2 per cent remains steadfast, but the path to get there is fraught with uncertainty. 

Hence, while inflation may be slowing, the Federal Reserve's next moves are anything but clear. As policymakers grapple with the challenges of the current economic landscape, consumers and businesses alike are left to navigate the implications of these decisions. The coming months will be crucial in determining the trajectory of inflation and the overall health of the economy.

As inflation shows signs of slowing, the Federal Reserve faces a complex decision-making landscape regarding its future monetary policies. Recent data indicates that inflation has decreased, with the annual rate dropping to 3.

As inflation shows signs of slowing, the Federal Reserve faces a complex decision-making landscape regarding its future monetary policies. Recent data indicates that inflation has decreased, with the annual rate dropping to 3.7 per cent in August, down from 3.8 per cent in July. This marks a significant shift from the peak inflation rate of 9.1 per cent recorded by the US economy in June 2022, providing a glimmer of hope for consumers and policymakers alike as detailed in a CNBC report. Despite this positive trend, the Federal Reserve remains cautious. The latest consumer price index (CPI) report reveals that while inflation is easing, core inflation, excluding volatile food and energy prices, rose by 4.3 per cent year-on-year. This persistent core inflation poses a challenge for the Fed as it weighs the implications of further interest rate adjustments. The Federal Reserve's recent actions, including a pause in rate hikes during its September meeting, reflect a careful balancing act. While the central bank has raised interest rates aggressively over the past year to combat inflation, the potential for economic slowdown looms large. Many economists anticipate that the Fed may opt for a "higher for longer" approach, keeping interest rates elevated to ensure inflation continues to decline. The impact of these decisions extends beyond monetary policy. Consumers are already feeling the effects of rising prices on everyday goods and services. The latest CPI report indicates that food prices have increased by 3.6 per cent year-on-year, while energy prices have surged by 5.6 per cent. These rising costs are straining household budgets, leading to increased scrutiny of the Fed's actions. Moreover, the uncertainty surrounding the Fed's next moves is further complicated by geopolitical factors and global economic conditions. The ongoing conflict in Ukraine and supply chain disruptions continue to exert pressure on prices. As the Fed navigates this challenging environment, market analysts are closely monitoring signals that could indicate the central bank's next steps. In the face of these developments, consumers are left wondering how the Fed's decisions will affect their financial well-being. With interest rates already at their highest levels in over two decades, borrowing costs for mortgages, car loans, and credit cards are likely to remain elevated. This could lead to a slowdown in consumer spending, which is a critical driver of economic growth. As the Federal Reserve prepares for its next meeting, the stakes are high. A misstep could have far-reaching consequences for the US economy, impacting everything from inflation rates to employment levels. The central bank's commitment to achieving its inflation target of 2 per cent remains steadfast, but the path to get there is fraught with uncertainty. Hence, while inflation may be slowing, the Federal Reserve's next moves are anything but clear. As policymakers grapple with the challenges of the current economic landscape, consumers and businesses alike are left to navigate the implications of these decisions. The coming months will be crucial in determining the trajectory of inflation and the overall health of the economy.

Inflation slows down, but uncertainty surrounds Federal Reserve's next move

Seen as a positive development for the US economy, a recent paper published by the Federal Reserve indicates that housing inflation is likely to decrease in the year ahead. The research was published on September 3, by the federal Reserve Bank of San Francisco. This projection comes at a time when the housing market has been under intense scrutiny from both policymakers and economists as detailed in a Reuters report. <o:p></o:p>

Economic implications of declining housing inflation<o:p></o:p>

The Federal Reserve's analysis highlights several key factors that are converging to create a potential cooling effect on housing costs. A combination of increased housing supply, a shift in buyer demand, and the possibility of more lenient monetary policy could all contribute to easing inflationary pressures. As the Fed states, "We expect housing inflation to fall as the adjustments in supply begin to take hold."<o:p></o:p>

This forecast could have significant implications for the broader economy, particularly in terms of consumer spending and affordability in the housing market. Reduced inflation in housing is likely to free up financial resources for families, allowing them to invest in other areas of the economy, which could stimulate further economic growth. For instance, with lower housing costs, families may have more disposable income to spend on other goods and services, thereby boosting consumer spending and potentially driving economic expansion.<o:p></o:p>

Future outlook and monetary policy implications<o:p></o:p>

Looking ahead, the Fed's findings could influence monetary policy decisions. Lower housing inflation might lead to a reconsideration of interest rate hikes, providing the Fed with more flexibility in shaping its financial strategy. Economists suggest that if housing costs stabilize, it may allow the Fed to adopt a more liberal approach to monetary policy, potentially avoiding aggressive interest rate increases that could otherwise dampen economic growth.<o:p></o:p>

As the landscape of the housing market evolves, the Fed emphasizes the importance of monitoring these trends closely. "Ongoing evaluation of market dynamics will be crucial," they note, indicating a proactive stance in managing inflation expectations.<o:p></o:p>

Fed to remain data driven<o:p></o:p>

The US Fed hence, according to the chair Jerome Powell is going to remain data driven to deal with the ever-evolving global economy. Further, the anticipated decline in housing inflation presents a welcome prospect for many households and reflects a shift in the economic narrative surrounding the US housing market.<o:p></o:p>

With this expected change, stakeholders across the property and finance sectors will need to adjust their strategies to align with the evolving economic conditions. This includes real estate developers, lenders, and investors, who must adapt to the new market dynamics to remain competitive.<o:p></o:p>

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<o:p>&nbsp;</o:p>

Seen as a positive development for the US economy, a recent paper published by the Federal Reserve indicates that housing inflation is likely to decrease in the year ahead.

Seen as a positive development for the US economy, a recent paper published by the Federal Reserve indicates that housing inflation is likely to decrease in the year ahead. The research was published on September 3, by the federal Reserve Bank of San Francisco. This projection comes at a time when the housing market has been under intense scrutiny from both policymakers and economists as detailed in a Reuters report. Economic implications of declining housing inflation The Federal Reserve's analysis highlights several key factors that are converging to create a potential cooling effect on housing costs. A combination of increased housing supply, a shift in buyer demand, and the possibility of more lenient monetary policy could all contribute to easing inflationary pressures. As the Fed states, "We expect housing inflation to fall as the adjustments in supply begin to take hold." This forecast could have significant implications for the broader economy, particularly in terms of consumer spending and affordability in the housing market. Reduced inflation in housing is likely to free up financial resources for families, allowing them to invest in other areas of the economy, which could stimulate further economic growth. For instance, with lower housing costs, families may have more disposable income to spend on other goods and services, thereby boosting consumer spending and potentially driving economic expansion. Future outlook and monetary policy implications Looking ahead, the Fed's findings could influence monetary policy decisions. Lower housing inflation might lead to a reconsideration of interest rate hikes, providing the Fed with more flexibility in shaping its financial strategy. Economists suggest that if housing costs stabilize, it may allow the Fed to adopt a more liberal approach to monetary policy, potentially avoiding aggressive interest rate increases that could otherwise dampen economic growth. As the landscape of the housing market evolves, the Fed emphasizes the importance of monitoring these trends closely. "Ongoing evaluation of market dynamics will be crucial," they note, indicating a proactive stance in managing inflation expectations. Fed to remain data driven The US Fed hence, according to the chair Jerome Powell is going to remain data driven to deal with the ever-evolving global economy. Further, the anticipated decline in housing inflation presents a welcome prospect for many households and reflects a shift in the economic narrative surrounding the US housing market. With this expected change, stakeholders across the property and finance sectors will need to adjust their strategies to align with the evolving economic conditions. This includes real estate developers, lenders, and investors, who must adapt to the new market dynamics to remain competitive.

US housing inflation anticipated to decline in the coming year, according to federal reserve report

A large majority of economists surveyed believe that interest rates will come down by only a quarter point in September, at odds with some calls by large Wall Street banks for a jumbo cut at the next meeting.

Almost four-fifths of economists surveyed by Bloomberg expect the Fed to lower rates to 5-5.25 per cent at its Sept. 17-18 meeting, while most of the remaining respondents see a bigger cut. The median projection calls for only a 10 per cent chance of an extraordinary move to shift rates before the meeting.

However, Fed policymakers have pushed back on the need for aggressive actions following a weaker-than-expected jobs report in July, when hiring slowed markedly, and the unemployment rate rose to its highest level in nearly three years.

Fed Chair Jerome Powell and other Fed leaders have said they are putting increased weight on their full employment mandate while striving to reduce inflation to their 2 per cent target.

On the other hand, some key Wall Street banks, like JPMorgan Chase &amp; Co. and Citigroup Inc., revised their calls in the wake of last week's jobs report to call for a half-point move next month. In response, futures investors priced in a 100-basis-point reduction by year-end, starting with a 50-basis-point cut next month.

Yet, the consensus among economists had been that the Fed would approve a more modest quarter-point move at meetings in September, November and December and the first quarter of 2025. The 51 economists were polled August 6-8 in the wake of a global market selloff.

Calls for a jumbo-sized cut 'are overdone and a knee-jerk reaction,' said Ryan Sweet, chief US economist at Oxford Economics. 'Historically, the Federal Open Market Committee has delivered intermeeting cuts and cuts larger than 25bps when there was a clear negative economic shock or when the data were worse than they have been so far.'

A large majority of economists surveyed believe that interest rates will come down by only a quarter point in September, at odds with some calls by large Wall Street banks for a jumbo cut at the next meeting.

A large majority of economists surveyed believe that interest rates will come down by only a quarter point in September, at odds with some calls by large Wall Street banks for a jumbo cut at the next meeting. Almost four-fifths of economists surveyed by Bloomberg expect the Fed to lower rates to 5-5.25 per cent at its Sept. 17-18 meeting, while most of the remaining respondents see a bigger cut. The median projection calls for only a 10 per cent chance of an extraordinary move to shift rates before the meeting. However, Fed policymakers have pushed back on the need for aggressive actions following a weaker-than-expected jobs report in July, when hiring slowed markedly, and the unemployment rate rose to its highest level in nearly three years. Fed Chair Jerome Powell and other Fed leaders have said they are putting increased weight on their full employment mandate while striving to reduce inflation to their 2 per cent target. On the other hand, some key Wall Street banks, like JPMorgan Chase & Co. and Citigroup Inc., revised their calls in the wake of last week's jobs report to call for a half-point move next month. In response, futures investors priced in a 100-basis-point reduction by year-end, starting with a 50-basis-point cut next month. Yet, the consensus among economists had been that the Fed would approve a more modest quarter-point move at meetings in September, November and December and the first quarter of 2025. The 51 economists were polled August 6-8 in the wake of a global market selloff. Calls for a jumbo-sized cut 'are overdone and a knee-jerk reaction,' said Ryan Sweet, chief US economist at Oxford Economics. 'Historically, the Federal Open Market Committee has delivered intermeeting cuts and cuts larger than 25bps when there was a clear negative economic shock or when the data were worse than they have been so far.'

Economists remain cautious amid divergent projections on Fed rate cuts

Oil is headed for a fourth consecutive weekly slide, as concerns over demand from the world's biggest economies are outweighing increased geopolitical tensions. Brent traded near $80 a barrel after a 1.6 per cent drop in yesterday's session, with West Texas Intermediate below $77. Factory gauges in the US and China both showed a contraction on Thursday, indicating signs of weakness in manufacturing.

Although prices did surge briefly on Wednesday, after the killing of Hamas and Hezbollah leaders that raised tension in West Asia, the pressure on oil prices has not abated. There are still concerns about demand from China, the world's biggest oil importer, over its economic challenges. Bolstering the downward pressure was Thursday's reiteration by OPEC+ in a monitoring meeting of its plan to boost production in the next quarter.

It is the longest streak of weekly declines since December, with futures still modestly higher for the year. Some support has come from expectations that US monetary easing would perk up consumption, with Federal Reserve Chair Jerome Powell hinting an interest rate cut could happen as soon as September.

Other market metrics also suggest a less tight market. While still in a bullish backwardated structure, the gap between Brent's two nearest contracts has also narrowed. The spread was last trading at 60 cents a barrel in backwardation versus more than a dollar two weeks ago.

In summary, demand concerns in key economies and anticipated supply increases from OPEC+ weigh heavily on oil prices. With surging geopolitical tensions adding to the market's volatility, the outlook remains murky for oil, underscoring the tricky balance between supply, demand, and external drivers impacting the energy market.

Oil is headed for a fourth consecutive weekly slide, as concerns over demand from the world's biggest economies are outweighing increased geopolitical tensions. Brent traded near $80 a barrel after a 1.

Oil is headed for a fourth consecutive weekly slide, as concerns over demand from the world's biggest economies are outweighing increased geopolitical tensions. Brent traded near $80 a barrel after a 1.6 per cent drop in yesterday's session, with West Texas Intermediate below $77. Factory gauges in the US and China both showed a contraction on Thursday, indicating signs of weakness in manufacturing. Although prices did surge briefly on Wednesday, after the killing of Hamas and Hezbollah leaders that raised tension in West Asia, the pressure on oil prices has not abated. There are still concerns about demand from China, the world's biggest oil importer, over its economic challenges. Bolstering the downward pressure was Thursday's reiteration by OPEC+ in a monitoring meeting of its plan to boost production in the next quarter. It is the longest streak of weekly declines since December, with futures still modestly higher for the year. Some support has come from expectations that US monetary easing would perk up consumption, with Federal Reserve Chair Jerome Powell hinting an interest rate cut could happen as soon as September. Other market metrics also suggest a less tight market. While still in a bullish backwardated structure, the gap between Brent's two nearest contracts has also narrowed. The spread was last trading at 60 cents a barrel in backwardation versus more than a dollar two weeks ago. In summary, demand concerns in key economies and anticipated supply increases from OPEC+ weigh heavily on oil prices. With surging geopolitical tensions adding to the market's volatility, the outlook remains murky for oil, underscoring the tricky balance between supply, demand, and external drivers impacting the energy market.

Oil prices plunge as demand concerns and geopolitical tensions bite

Oil prices nudged higher as signs of another inventory draw in the US offset concerns on the timeline for Federal Reserve interest-rate cuts following Chair Jerome Powell's testimony.

Brent crude hovered close to $85 a barrel from a slide of more than 3 per cent in the previous three sessions, and West Texas Intermediate well below $82.

The American Petroleum Institute stated that the US crude stockpiles had a drop of 1.92 million barrels for the last week, with a big draw at the key Cushing, Oklahoma hub, according to sources with knowledge of the data. This comes after a more than 12 million-barrel plunge in stockpiles the prior week.

Despite recent volatility, oil prices are still easier for the year to date, underpinned by OPEC+ production cuts allied to expectations of easier monetary policy in the US. Powell said on Tuesday he was watching labour market weaknesses closely, but more evidence is needed of a slowdown in inflation before cutting borrowing costs.

This subdued crude trading, in particular, has weighed on measures of volatility. Brent's implied volatility—a forecast of likely movement in oil futures based on options pricing—is near its lowest level in about six years.

Traders now Await the monthly report from the Organization of the Petroleum Exporting Countries, due later in the day, which is expected to shed more light on the global market outlook. A similar report by the International Energy Agency is due tomorrow.

To sum up, oil prices inched up, with US crude inventories trimming a bit of the excess and supported by the broader market, underpinned by OPEC+ supply cuts and possible shifts in US monetary policy. The forthcoming reports from OPEC and IEA will have wide attention for further signs of the trend.

Oil prices nudged higher as signs of another inventory draw in the US offset concerns on the timeline for Federal Reserve interest-rate cuts following Chair Jerome Powell's testimony.

Oil prices nudged higher as signs of another inventory draw in the US offset concerns on the timeline for Federal Reserve interest-rate cuts following Chair Jerome Powell's testimony. Brent crude hovered close to $85 a barrel from a slide of more than 3 per cent in the previous three sessions, and West Texas Intermediate well below $82. The American Petroleum Institute stated that the US crude stockpiles had a drop of 1.92 million barrels for the last week, with a big draw at the key Cushing, Oklahoma hub, according to sources with knowledge of the data. This comes after a more than 12 million-barrel plunge in stockpiles the prior week. Despite recent volatility, oil prices are still easier for the year to date, underpinned by OPEC+ production cuts allied to expectations of easier monetary policy in the US. Powell said on Tuesday he was watching labour market weaknesses closely, but more evidence is needed of a slowdown in inflation before cutting borrowing costs. This subdued crude trading, in particular, has weighed on measures of volatility. Brent's implied volatility—a forecast of likely movement in oil futures based on options pricing—is near its lowest level in about six years. Traders now Await the monthly report from the Organization of the Petroleum Exporting Countries, due later in the day, which is expected to shed more light on the global market outlook. A similar report by the International Energy Agency is due tomorrow. To sum up, oil prices inched up, with US crude inventories trimming a bit of the excess and supported by the broader market, underpinned by OPEC+ supply cuts and possible shifts in US monetary policy. The forthcoming reports from OPEC and IEA will have wide attention for further signs of the trend.

Is the Fed's hesitation fuelling a surge in oil prices?

In a surprising turn of events, US consumer prices fell marginally, highlighting the view that the disinflationary trend is getting firmer and puts the Federal Reserve closer to interest rate cuts.

The Bureau of Labor Statistics reported Thursday that the all-items seasonally adjusted consumer price index dropped 0.1 per cent in June after it was unchanged the previous month.

It's the second month in a row with low readings in core CPI, boosting confidence among Federal Reserve officials that inflation is finally cooling.

The broad CPI rose 3.0 per cent in the 12 months through June, compared with a 3.3 per cent increase in May.

It is the weakest annual rise in a year. Economists surveyed by Reuters had expected a 0.1 per cent gain for June and a year-over-year increase of 3.1 per cent, showing how much of a surprise came in the figures.

The annual rise in consumer prices was at 9.1 per cent in June 2022, but the CPI remains significantly higher than measures monitored by the Federal Reserve for its 2 per cent inflation goal.

Other important measures for the Fed, PCE price indexes, climbed 2.6 per cent in May.

This also comes a few days after news that the unemployment rate ticked higher to 4.1 per cent in June from 4.0 per cent in May, which has not been this high since March 2020.

At the same time, economic growth has cooled in response to aggressive rate hikes by the Fed in 2022 and 2023.

Second-quarter gross domestic product is forecasted to rise at an annualised 1.8 per cent, well below the level concluded as strong enough to increase inflation, as considered by policymakers.

Although Federal Reserve Chair Jerome Powell acknowledged recent positive trends in price pressures, he remained cautious.

He told lawmakers this week that he wouldn't declare victory over inflation, saying "more good data would strengthen" the case for rate cuts.

With financial markets and many economists now considering that labour markets are cooling down and that the economy is slowing, they expect the Federal Reserve to kick off its easing cycle in September.

The central bank has left its benchmark overnight interest rate in the 5.25 per cent-5.50 per cent range since last July, following a 525 basis point hike to its policy rate since 2022.

Excluding food and energy—the two most volatile components—the CPI rose 0.1 per cent, following a 0.2 per cent increase in May.

A year ago, core CPI rose 3.3 per cent versus a 3.4 per cent increase in May, underscoring expectations that underlying inflationary pressures are continuing to cool.

(With inputs from Reuters)

In a surprising turn of events, US consumer prices fell marginally, highlighting the view that the disinflationary trend is getting firmer and puts the Federal Reserve closer to interest rate cuts.

In a surprising turn of events, US consumer prices fell marginally, highlighting the view that the disinflationary trend is getting firmer and puts the Federal Reserve closer to interest rate cuts. The Bureau of Labor Statistics reported Thursday that the all-items seasonally adjusted consumer price index dropped 0.1 per cent in June after it was unchanged the previous month. It's the second month in a row with low readings in core CPI, boosting confidence among Federal Reserve officials that inflation is finally cooling. The broad CPI rose 3.0 per cent in the 12 months through June, compared with a 3.3 per cent increase in May. It is the weakest annual rise in a year. Economists surveyed by Reuters had expected a 0.1 per cent gain for June and a year-over-year increase of 3.1 per cent, showing how much of a surprise came in the figures. The annual rise in consumer prices was at 9.1 per cent in June 2022, but the CPI remains significantly higher than measures monitored by the Federal Reserve for its 2 per cent inflation goal. Other important measures for the Fed, PCE price indexes, climbed 2.6 per cent in May. This also comes a few days after news that the unemployment rate ticked higher to 4.1 per cent in June from 4.0 per cent in May, which has not been this high since March 2020. At the same time, economic growth has cooled in response to aggressive rate hikes by the Fed in 2022 and 2023. Second-quarter gross domestic product is forecasted to rise at an annualised 1.8 per cent, well below the level concluded as strong enough to increase inflation, as considered by policymakers. Although Federal Reserve Chair Jerome Powell acknowledged recent positive trends in price pressures, he remained cautious. He told lawmakers this week that he wouldn't declare victory over inflation, saying "more good data would strengthen" the case for rate cuts. With financial markets and many economists now considering that labour markets are cooling down and that the economy is slowing, they expect the Federal Reserve to kick off its easing cycle in September. The central bank has left its benchmark overnight interest rate in the 5.25 per cent-5.50 per cent range since last July, following a 525 basis point hike to its policy rate since 2022. Excluding food and energy—the two most volatile components—the CPI rose 0.1 per cent, following a 0.2 per cent increase in May. A year ago, core CPI rose 3.3 per cent versus a 3.4 per cent increase in May, underscoring expectations that underlying inflationary pressures are continuing to cool. (With inputs from Reuters)

US consumer prices decline, bringing Fed closer to rate cuts

US Federal Reserve head Jerome Powell will testify before the Senate Banking Committee on monetary policy on July 9, according to Senator Sherrod Brown's office, the committee head, on Monday. Powell is likely to give the same testimony before the House Financial Services Committee the next day, as is customary, though officials for the committee have not confirmed this.<o:p></o:p>

<h2 class="MsoNormal">Powell's semi-annual testimony<o:p></o:p></h2>

Powell's appearances before Congress are often lengthy sessions in which politicians from both parties question him on a variety of issues, ranging from interest rate policy to the overall health of the financial system. These testimonies provide an opportunity for the Federal Reserve to communicate its policy aims while also allowing legislators to express their economic concerns and opinions.<o:p></o:p>

<h2 class="MsoNormal">Central bank independence<o:p></o:p></h2>

Powell, who was nominated by former President Donald Trump and reappointed by President Joe Biden, has often stressed the Federal Reserve's independence from political influence. The Fed's recent decision to keep the policy rate between 5.25 per cent to 5.5 per cent reflects this position, with indications that a rate decrease may only occur once this year, depending on economic conditions. This approach implies that the central bank intends to avoid any moves that could be interpreted as politically motivated, particularly considering the November presidential election.<o:p></o:p>

<h2 class="MsoNormal">Economic conditions and rate decisions<o:p></o:p></h2>

The Federal Reserve's outlook, which calls for a modest drop in inflation and labour market stability, might lead to the central bank remaining stable until after the election. Such a step is seen to maintain economic stability without political involvement.<o:p></o:p>

<h2 class="MsoNormal">Political implications<o:p></o:p></h2>

Senator Brown and other Democrats have pushed the Federal Reserve to lower interest rates to increase house affordability. A rate drop before the election might potentially help President Biden in his next duel with Trump. Trump has expressed concerns that the Fed may decrease interest rates to affect the election outcome, stressing the political sensitivity of the central bank's choices.<o:p></o:p>

(With inputs from Agencies)<o:p></o:p>

US Federal Reserve head Jerome Powell will testify before the Senate Banking Committee on monetary policy on July 9, according to Senator Sherrod Brown's office, the committee head, on Monday.

US Federal Reserve head Jerome Powell will testify before the Senate Banking Committee on monetary policy on July 9, according to Senator Sherrod Brown's office, the committee head, on Monday. Powell is likely to give the same testimony before the House Financial Services Committee the next day, as is customary, though officials for the committee have not confirmed this. Powell's semi-annual testimony Powell's appearances before Congress are often lengthy sessions in which politicians from both parties question him on a variety of issues, ranging from interest rate policy to the overall health of the financial system. These testimonies provide an opportunity for the Federal Reserve to communicate its policy aims while also allowing legislators to express their economic concerns and opinions. Central bank independence Powell, who was nominated by former President Donald Trump and reappointed by President Joe Biden, has often stressed the Federal Reserve's independence from political influence. The Fed's recent decision to keep the policy rate between 5.25 per cent to 5.5 per cent reflects this position, with indications that a rate decrease may only occur once this year, depending on economic conditions. This approach implies that the central bank intends to avoid any moves that could be interpreted as politically motivated, particularly considering the November presidential election. Economic conditions and rate decisions The Federal Reserve's outlook, which calls for a modest drop in inflation and labour market stability, might lead to the central bank remaining stable until after the election. Such a step is seen to maintain economic stability without political involvement. Political implications Senator Brown and other Democrats have pushed the Federal Reserve to lower interest rates to increase house affordability. A rate drop before the election might potentially help President Biden in his next duel with Trump. Trump has expressed concerns that the Fed may decrease interest rates to affect the election outcome, stressing the political sensitivity of the central bank's choices. (With inputs from Agencies)

Fed Chair Powell to testify before Senate Banking committee on July 9

On Wednesday, the Federal Reserve chose to keep current interest rates unchanged, implying that any rate decreases may not occur until December. This decision is consistent with the Fed's assessment of an economy that has performed consistently across key parameters in recent years. Fed Chair Jerome Powell stated that the current economic conditions, which are marked by strong growth and low unemployment, do not need quick rate adjustments.<o:p></o:p>

<h2 class="MsoNormal">Focus on inflation and the labour market<o:p></o:p></h2>

Powell remarked that the Federal Reserve is content with its present rate policy until there is a dramatic change in economic signals, such as a sharp drop in inflation or an increase in unemployment. "These dynamics can continue for as long as they continue," Powell said at a press conference concluding the two-day policy meeting. He added that inflation had declined without significantly affecting the economy, implying that this trend may continue.<o:p></o:p>

Because of the Fed's conservative approach, inflation is likely to gradually fall to the 2 per cent target. The central bank's preferred inflation measure, the personal consumption expenditures (PCE) price index, is expected to remain essentially steady for the rest of the year, with only a quarter-point rate drop planned.<o:p></o:p>

<h2 class="MsoNormal">Market reactions and future projections<o:p></o:p></h2>

The market reacted positively, with the S&amp;P 500 and Nasdaq Composite indexes closing considerably higher. In reaction, the US currency and Treasury yields plummeted. Investors mostly maintained their forecasts for quarter-point rate cuts in September and December, suggesting confidence in the Fed's strategic posture.<o:p></o:p>

Powell admitted that future rate decreases would be based on thorough data analysis, including inflation patterns, labour market conditions, and overall economic development. "We don't make decisions about future meetings until we get there," he stated, highlighting the Fed's data-driven strategy.<o:p></o:p>

<h2 class="MsoNormal">Long-term economic outlook<o:p></o:p></h2>

Despite a weak first quarter, the Fed expects the economy to grow at an above-trend rate of 2.1 per cent this year, with unemployment remaining stable at 4 per cent. The policy statement underlined the persistence of strong employment gains and robust economic activity.<o:p></o:p>

The Federal Reserve also raised its long-term "neutral" rate, which is necessary to keep inflation under control while preserving growth, from 2.6 per cent to 2.8 per cent. This change reflects the Fed's forecast for longer-term inflationary pressures.<o:p></o:p>

Powell pointed out that, while the long-term rate adjustment has no direct impact on short-term rate projections, the Fed is regularly monitoring the restrictiveness of its monetary policy, which has been severely tightened over the previous two years to combat high inflation following the epidemic.<o:p></o:p>

(With inputs from Agencies)<o:p></o:p>

On Wednesday, the Federal Reserve chose to keep current interest rates unchanged, implying that any rate decreases may not occur until December. This decision is consistent with the Fed's assessment of an economy that has performed consistently across key parameters in recent years.

On Wednesday, the Federal Reserve chose to keep current interest rates unchanged, implying that any rate decreases may not occur until December. This decision is consistent with the Fed's assessment of an economy that has performed consistently across key parameters in recent years. Fed Chair Jerome Powell stated that the current economic conditions, which are marked by strong growth and low unemployment, do not need quick rate adjustments. Focus on inflation and the labour market Powell remarked that the Federal Reserve is content with its present rate policy until there is a dramatic change in economic signals, such as a sharp drop in inflation or an increase in unemployment. "These dynamics can continue for as long as they continue," Powell said at a press conference concluding the two-day policy meeting. He added that inflation had declined without significantly affecting the economy, implying that this trend may continue. Because of the Fed's conservative approach, inflation is likely to gradually fall to the 2 per cent target. The central bank's preferred inflation measure, the personal consumption expenditures (PCE) price index, is expected to remain essentially steady for the rest of the year, with only a quarter-point rate drop planned. Market reactions and future projections The market reacted positively, with the S&P 500 and Nasdaq Composite indexes closing considerably higher. In reaction, the US currency and Treasury yields plummeted. Investors mostly maintained their forecasts for quarter-point rate cuts in September and December, suggesting confidence in the Fed's strategic posture. Powell admitted that future rate decreases would be based on thorough data analysis, including inflation patterns, labour market conditions, and overall economic development. "We don't make decisions about future meetings until we get there," he stated, highlighting the Fed's data-driven strategy. Long-term economic outlook Despite a weak first quarter, the Fed expects the economy to grow at an above-trend rate of 2.1 per cent this year, with unemployment remaining stable at 4 per cent. The policy statement underlined the persistence of strong employment gains and robust economic activity. The Federal Reserve also raised its long-term "neutral" rate, which is necessary to keep inflation under control while preserving growth, from 2.6 per cent to 2.8 per cent. This change reflects the Fed's forecast for longer-term inflationary pressures. Powell pointed out that, while the long-term rate adjustment has no direct impact on short-term rate projections, the Fed is regularly monitoring the restrictiveness of its monetary policy, which has been severely tightened over the previous two years to combat high inflation following the epidemic. (With inputs from Agencies)

Federal Reserve holds interest rates steady, delays rate cuts

Federal Reserve Chair Jerome Powell said the US central bank needs to be patient as it awaits more evidence that high interest rates are curbing inflation, doubling-down on the need to keep borrowing costs elevated. Watch in for more details!

US Fed likely to keep rates higher for longer to curb inflation

The US Federal Reserve has opted to maintain interest rates at their current levels in its latest meeting, indicating a continued inclination towards potential future rate cuts. <o:p></o:p>

However, the central bank was apprehensive regarding recent below par inflation metrics, suggesting that such cuts might be delayed until further progress is observed. <o:p></o:p>

Federal Reserve Chair Jerome Powell noted the extended timeline required for policymakers to regain confidence in inflation trends; he said that the anticipated decline towards the targeted 2 per cent might take longer than previously expected.<o:p></o:p>

Powell elaborated on the current economic stance, noting that while the initial months of 2024 saw rapid price hikes, the anticipated decline in inflation has been slower to materialise. <o:p></o:p>

Although he affirmed that rate hikes are unlikely, Powell hinted at the possibility of an extended period of maintaining the benchmark policy rate within the 5.25-5.50 per cent range, in place since July. <o:p></o:p>

He stressed that the current policy rate continues to exert sufficient pressure on economic activity, with patience being key until signs of inflation moderation become evident.<o:p></o:p>

"Inflation is still too high," Powell stated during a post-meeting press conference. <o:p></o:p>

He expressed a lowered confidence in the previous forecast of inflation decline over the year, further highlighting the uncertainty surrounding the future trajectory of inflation. <o:p></o:p>

Powell said that the decision regarding rate cuts depends on incoming data, with various scenarios under consideration based on inflation persistence and labour market strength.<o:p></o:p>

Despite the prevailing economic uncertainties, Powell's declaration that rate hikes are improbable provided a sense of relief to investors wary of a potentially hawkish Federal Reserve stance. <o:p></o:p>

Consequently, US stock and bond prices rebounded, indicating &nbsp;optimism surrounding a delayed timeline for rate cuts. <o:p></o:p>

Analysts noted that Powell's remarks were less hawkish than anticipated.<o:p></o:p>

The Fed's policy statement repeated its cautious approach, necessitating greater confidence in sustained inflation movement towards the 2 per cent target before considering rate reductions. <o:p></o:p>

The central bank highlighted concerns over the lack of progress towards achieving this objective in recent months. <o:p></o:p>

Additionally, the Federal Reserve announced adjustments to its balance sheet reduction strategy, aiming to prevent a shortage of reserves in the financial system, a situation experienced in 2019 during the previous round of quantitative tightening.<o:p></o:p>

Responding to economic queries, Powell dismissed comparisons to the stagflation period of the late 1970s, asserting that the current economic landscape differs significantly. <o:p></o:p>

He cited solid growth rates and inflation levels below 3 per cent, indicating a contrast to the conditions prevalent during the stagflation era. <o:p></o:p>

Powell emphasised the absence of stagnant growth and hyperinflation.<o:p></o:p>

(With inputs from Reuters)<o:p></o:p>

The US Federal Reserve has opted to maintain interest rates at their current levels in its latest meeting, indicating a continued inclination towards potential future rate cuts.

The US Federal Reserve has opted to maintain interest rates at their current levels in its latest meeting, indicating a continued inclination towards potential future rate cuts. However, the central bank was apprehensive regarding recent below par inflation metrics, suggesting that such cuts might be delayed until further progress is observed. Federal Reserve Chair Jerome Powell noted the extended timeline required for policymakers to regain confidence in inflation trends; he said that the anticipated decline towards the targeted 2 per cent might take longer than previously expected. Powell elaborated on the current economic stance, noting that while the initial months of 2024 saw rapid price hikes, the anticipated decline in inflation has been slower to materialise. Although he affirmed that rate hikes are unlikely, Powell hinted at the possibility of an extended period of maintaining the benchmark policy rate within the 5.25-5.50 per cent range, in place since July. He stressed that the current policy rate continues to exert sufficient pressure on economic activity, with patience being key until signs of inflation moderation become evident. "Inflation is still too high," Powell stated during a post-meeting press conference. He expressed a lowered confidence in the previous forecast of inflation decline over the year, further highlighting the uncertainty surrounding the future trajectory of inflation. Powell said that the decision regarding rate cuts depends on incoming data, with various scenarios under consideration based on inflation persistence and labour market strength. Despite the prevailing economic uncertainties, Powell's declaration that rate hikes are improbable provided a sense of relief to investors wary of a potentially hawkish Federal Reserve stance. Consequently, US stock and bond prices rebounded, indicating optimism surrounding a delayed timeline for rate cuts. Analysts noted that Powell's remarks were less hawkish than anticipated. The Fed's policy statement repeated its cautious approach, necessitating greater confidence in sustained inflation movement towards the 2 per cent target before considering rate reductions. The central bank highlighted concerns over the lack of progress towards achieving this objective in recent months. Additionally, the Federal Reserve announced adjustments to its balance sheet reduction strategy, aiming to prevent a shortage of reserves in the financial system, a situation experienced in 2019 during the previous round of quantitative tightening. Responding to economic queries, Powell dismissed comparisons to the stagflation period of the late 1970s, asserting that the current economic landscape differs significantly. He cited solid growth rates and inflation levels below 3 per cent, indicating a contrast to the conditions prevalent during the stagflation era. Powell emphasised the absence of stagnant growth and hyperinflation. (With inputs from Reuters)

Federal Reserve holds rates steady, raises concerns over lack of inflation progress

Federal Reserve Chair Jerome Powell has said the latest inflation data is "along the lines of what the fed would like to see." his comments appear to keep the central bank's baseline for interest rate cuts this year intact.

Powell: Inflation data along the lines we would like to see

The US Federal Reserve has decided to maintain its benchmark interest rates at 5.25-5.50 per cent for the fifth consecutive meeting, according to an announcement made after the Federal Open Market Committee (FOMC) meeting on March 20. <o:p></o:p>

Despite persistent inflation concerns, the Federal Reserve remains poised for potential rate cuts in 2024. <o:p></o:p>

This decision comes amidst a backdrop of economic uncertainty and evolving projections for GDP growth and inflation. <o:p></o:p>

The Fed's decision to keep interest rates steady is an attempt to balance the objectives of maximum employment and stable inflation. <o:p></o:p>

Since July 2023, the central bank has maintained rates at their highest level in over two decades. <o:p></o:p>

The Federal Reserve foresees three potential rate cuts in 2024, signalling a shift in monetary policy amid ongoing inflationary pressures. <o:p></o:p>

This decision aligns with expectations, indicating the Fed's cautious approach towards economic stabilisation.<o:p></o:p>

Alongside its rate decision, the Federal Reserve revised its economic projections, anticipating a stronger GDP growth rate of 2.1 per cent for the year 2024, up from the previous estimate of 1.4 per cent. <o:p></o:p>

Despite maintaining the headline inflation forecast, the Fed slightly raised its projection for 'core' inflation to 2.6 per cent. <o:p></o:p>

Additionally, the unemployment rate forecast was adjusted downward to 4 per cent for 2024.<o:p></o:p>

Following the Fed's announcement, the S&amp;P 500 surpassed the historic 5,200-mark for the first time, signalling investor optimism. <o:p></o:p>

The tech-heavy Nasdaq 100 also experienced a notable uptick. <o:p></o:p>

Concurrently, bond yields exhibited a downward trend, with two-year yields declining by seven basis points and the yield on 10-year Treasuries dropping by two basis points. <o:p></o:p>

Federal Reserve Chair Jerome Powell indicated a forthcoming adjustment in the central bank's strategy regarding the reduction of its balance sheet. <o:p></o:p>

While no concrete decisions were made during the meeting, Powell emphasised intentions to slow the pace of asset sales in the near future. <o:p></o:p>

This move aims to mitigate liquidity concerns and provides the Federal Reserve with greater flexibility to address economic challenges. <o:p></o:p>

"While we did not make any decisions today, the general sense of the committee is that it will be appropriate to slow the pace of runoff fairly soon, consistent with the plans we previously issued,” a CNBC report quoted Powell as saying.<o:p></o:p>

Despite maintaining a steady stance on rates, Powell reiterated the likelihood of initiating rate cuts later in the year, contingent upon economic data. <o:p></o:p>

Market indicators suggest a 75 per cent probability of the first rate cut occurring during the June 11-12 meeting. <o:p></o:p>

The US Federal Reserve has decided to maintain its benchmark interest rates at 5.25-5.50 per cent for the fifth consecutive meeting, according to an announcement made after the Federal Open Market Committee (FOMC) meeting on March 20.

The US Federal Reserve has decided to maintain its benchmark interest rates at 5.25-5.50 per cent for the fifth consecutive meeting, according to an announcement made after the Federal Open Market Committee (FOMC) meeting on March 20. Despite persistent inflation concerns, the Federal Reserve remains poised for potential rate cuts in 2024. This decision comes amidst a backdrop of economic uncertainty and evolving projections for GDP growth and inflation. The Fed's decision to keep interest rates steady is an attempt to balance the objectives of maximum employment and stable inflation. Since July 2023, the central bank has maintained rates at their highest level in over two decades. The Federal Reserve foresees three potential rate cuts in 2024, signalling a shift in monetary policy amid ongoing inflationary pressures. This decision aligns with expectations, indicating the Fed's cautious approach towards economic stabilisation. Alongside its rate decision, the Federal Reserve revised its economic projections, anticipating a stronger GDP growth rate of 2.1 per cent for the year 2024, up from the previous estimate of 1.4 per cent. Despite maintaining the headline inflation forecast, the Fed slightly raised its projection for 'core' inflation to 2.6 per cent. Additionally, the unemployment rate forecast was adjusted downward to 4 per cent for 2024. Following the Fed's announcement, the S&P 500 surpassed the historic 5,200-mark for the first time, signalling investor optimism. The tech-heavy Nasdaq 100 also experienced a notable uptick. Concurrently, bond yields exhibited a downward trend, with two-year yields declining by seven basis points and the yield on 10-year Treasuries dropping by two basis points. Federal Reserve Chair Jerome Powell indicated a forthcoming adjustment in the central bank's strategy regarding the reduction of its balance sheet. While no concrete decisions were made during the meeting, Powell emphasised intentions to slow the pace of asset sales in the near future. This move aims to mitigate liquidity concerns and provides the Federal Reserve with greater flexibility to address economic challenges. "While we did not make any decisions today, the general sense of the committee is that it will be appropriate to slow the pace of runoff fairly soon, consistent with the plans we previously issued,” a CNBC report quoted Powell as saying. Despite maintaining a steady stance on rates, Powell reiterated the likelihood of initiating rate cuts later in the year, contingent upon economic data. Market indicators suggest a 75 per cent probability of the first rate cut occurring during the June 11-12 meeting.

Federal Reserve holds rates steady amid high projections for 2024 rate cuts

Federal Reserve Chair Jerome Powell hinted at the central bank's growing confidence in considering interest rate cuts, stating they are "not far" from the needed assurance that inflation is sustainably moving towards the 2 per cent target, Bloomberg reported on Thursday.<o:p></o:p>

Speaking before the Senate Banking Committee, Powell underlined that the timing of the rate cut remains dependent on the confidence in inflation trends. <o:p></o:p>

His remarks contributed to the anticipation of a possible rate cut in the coming months, with traders adjusting their expectations following Powell's commentary.<o:p></o:p>

Powell highlighted that inflation's sustainable movement towards the 2 per cent mark would be crucial before initiating any rate cut. <o:p></o:p>

While stating that a rate cut might be appropriate "at some point this year," Powell remains cautious. <o:p></o:p>

The Federal Reserve had raised the benchmark federal funds rate significantly since March 2022 but has maintained it at a two-decade high since July. <o:p></o:p>

Powell's comments suggest a careful approach, with the central bank currently holding interest rates in the range of 5.25 per cent to 5.5 per cent. <o:p></o:p>

In December, the Federal Reserve projected three interest rate cuts for 2024, and the committee is set to update its forecasts in the upcoming March meeting.<o:p></o:p>

Following Powell's statements, the market reacted with a decline in two-year Treasury yields, and traders adjusted their expectations, increasing bets on a rate cut in June. <o:p></o:p>

The possibility of a rate cut comes amid strong job growth and a notable rise in prices in January. <o:p></o:p>

Powell's testimony over two days reflects a delicate balance between the need for economic stimulus and a cautious approach, considering the strong&nbsp;economic backdrop. <o:p></o:p>

Christine Lagarde, Powell's European counterpart, provided additional context, saying that the European Central Bank (ECB) may be positioned to lower rates in June. <o:p></o:p>

Lagarde highlighted the need for more evidence and detail before considering rate cuts. <o:p></o:p>

The ECB president said that it was important to gain confidence in the economic trends and added that more information would be available in June. <o:p></o:p>

Lagarde's comments come as the ECB keeps the deposit rate unchanged at 4 per cent for a fourth consecutive meeting.<o:p></o:p>

(With inputs from Bloomberg)<o:p></o:p>

Federal Reserve Chair Jerome Powell hinted at the central bank's growing confidence in considering interest rate cuts, stating they are "not far" from the needed assurance that inflation is sustainably moving towards the 2 per cent target, Bloomberg reported on Thursday.

Federal Reserve Chair Jerome Powell hinted at the central bank's growing confidence in considering interest rate cuts, stating they are "not far" from the needed assurance that inflation is sustainably moving towards the 2 per cent target, Bloomberg reported on Thursday. Speaking before the Senate Banking Committee, Powell underlined that the timing of the rate cut remains dependent on the confidence in inflation trends. His remarks contributed to the anticipation of a possible rate cut in the coming months, with traders adjusting their expectations following Powell's commentary. Powell highlighted that inflation's sustainable movement towards the 2 per cent mark would be crucial before initiating any rate cut. While stating that a rate cut might be appropriate "at some point this year," Powell remains cautious. The Federal Reserve had raised the benchmark federal funds rate significantly since March 2022 but has maintained it at a two-decade high since July. Powell's comments suggest a careful approach, with the central bank currently holding interest rates in the range of 5.25 per cent to 5.5 per cent. In December, the Federal Reserve projected three interest rate cuts for 2024, and the committee is set to update its forecasts in the upcoming March meeting. Following Powell's statements, the market reacted with a decline in two-year Treasury yields, and traders adjusted their expectations, increasing bets on a rate cut in June. The possibility of a rate cut comes amid strong job growth and a notable rise in prices in January. Powell's testimony over two days reflects a delicate balance between the need for economic stimulus and a cautious approach, considering the strong economic backdrop. Christine Lagarde, Powell's European counterpart, provided additional context, saying that the European Central Bank (ECB) may be positioned to lower rates in June. Lagarde highlighted the need for more evidence and detail before considering rate cuts. The ECB president said that it was important to gain confidence in the economic trends and added that more information would be available in June. Lagarde's comments come as the ECB keeps the deposit rate unchanged at 4 per cent for a fourth consecutive meeting. (With inputs from Bloomberg)

Fed Chair Jerome Powell signals potential interest rate cuts. Here are the details

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