FOMC 12/13/23 Market check

FOMC 12/13/23 Market check: FOMC policy statement, interest-rate decision, summary of economic projections, and Jerome Powell's presser.

The Federal Reserve wraps its last policy meeting of 2023 today. Central bank officials are expected to leave interest rates unchanged when the Federal Open Market Committee releases its statement at 2 p.m. Eastern.

That decision matters less than the FOMC's 2024 expectations, which will be published in its summary of economic projections. The focus will be on the Fed's projections for interest rates in the so-called dot plot.

Then eyes will turn to commentary from Fed Chair Jerome Powell. At 2:30 p.m., he will take the stage at the post-meeting press conference.

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Powell Says Fed Is Just at Beginning of Policy Easing Talks.
Fed holds rates steady again and pivots toward cuts in 2024.
Latest dot plot implies three quarter-point cuts next year.
Powell says it’s ‘far too early’ for Fed to declare victory.
Central bank says inflation eased but remains elevated. The Fed held interest rates steady for a third meeting and gave its clearest signal yet that its aggressive hiking campaign is finished by forecasting a series of three quarter-point cuts next year Powell said the committee discussed rate cuts at its meeting this week, but hasn’t ruled out the possibility of another hike if the data calls for it. While Wednesday’s vote was unanimous, there are clear divisions on the committee in their rate outlooks. Eight officials saw fewer than three quarter-point cuts next year, while five anticipated more. The committee is looking for a soft landing for the US economy, not a recession, with unemployment forecast to rise only slightly over the next few years. Markets embraced the more dovish tone by the FOMC and Powell, and are now pricing in the likelihood of the first rate cut in March.

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