All eyes are on the interest rate decision that the Fed will announce at 21:00 on Wednesday. Market expectation is that interest rates will remain constant. Latest US employment data makes it less likely that the Fed will cut interest rates in 2024.
The US Federal Reserve (FED) will announce the main interest rate on December 13 at 21:00 after its meetings on December 12 and 13. In the previous meeting, interest rates were left unchanged at 5.25-5.50%, the highest level in 22 years. The Fed had set the expected interest rates as 5.6 percent at the end of 2023, 5.1 percent in 2024, 3.9 percent in 2025 and 2.5 percent in the long term.
It is almost certain that interest rates will remain stable in the next two sessions. In his previous statement regarding interest rates, Chairman Powell emphasized the central bank’s determination to control inflation and said,
“We are making a determined and strong effort to ensure that inflation returns to our 2% target.”
Interest Rate Cut Opportunities Are Decreasing, At Least For Now.
The latest employment report published in the USA also sheds light on the state of the labor market. Some analysts predict that the interest rate cut will be postponed due to the impact of non-agricultural employment data. Evercore ISI analyst Krishna Guha said that the better-than-expected non-farm employment eliminated expectations that the Fed would cut interest rates in 2024.
Markets have long been expecting the Fed to cut interest rates for the first time next March. However, according to the latest news, these predictions have changed. Fed officials may revise their outlook for possible interest rate increases or decreases in 2024 in the new economic outlook summary they will publish next week.
