March 21, 2024
On March 20, 2024, the Federal Reserve opted to maintain the federal funds rate at its current level, 5.25% – 5.50%, aligning with market forecasts. Reiterating its commitment to achieving the 2% inflation target, the Fed emphasized the need for greater confidence in sustained inflationary movement before considering rate adjustments. Economic projections revealed upward revisions in GDP growth forecasts for both 2024 and 2025, alongside a lowered unemployment rate projection for 2024. While PCE inflation remained stable, Core PCE inflation saw a modest increase. Notably, the dot plot signalled three anticipated rate cuts in 2024, although the pace of reductions is expected to slow in subsequent years, suggesting a cautious approach to monetary policy adjustments.
The overall tone of the Fed’s projections appears moderately dovish, reflecting a balance between economic optimism and a prudent stance toward inflation. Market response hinges on Chairman Powell’s forthcoming remarks in the press conference, which will offer further insight into the Fed’s policy outlook and its implications for financial markets moving forward.
Federal Funds Target Rate
Dot Plot Graph
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