Summary of the Federal Reserve Press Conference on 13th December 2023.
FOMC leaves interest rates unchanged for the 3rd consecutive time in the 5.25% – 5.50% range.
- Continue to reduce securities holdings at a brisk pace as indicated in the Decisions Regarding Monetary Policy Implementation
- 3rd consecutive meeting that the Federal Open Market Committee (FOMC) chose to pause the interest rates hikes.
- Since March 2022, there have been 11 rate hikes, including 4 in 2023.
- “Inflation has eased over the past year”, indicating a temporary victory over inflation.
- None of the FED officials forecast any rates hikes next year but members indicated at least 3 rate cuts in 2024, probably multiple 0.25% point rate cuts.
- If the economy evolves as projected by FOMC participants, the median projection of the federal funds rate will be 4.6% at the end of 2024, 3.6% at the end of 2025, and 2.9% at the end of 2026.
- Strongly committed to returning inflation to its 2% objective.
Highlights of the FOMC press conference
Wall Street reacted positively with S&P500, Nasdaq100, and Dow Jones Industrial Average Indices rising by 1.32%, 1.27%, and 1.41% respectively after the meeting. Stocks Surge on FOMC Meeting Results
References
- Transcript of Chair Powell’s Press Conference Opening Statement December 13, 2023
- The official press release from the United States Federal Reserve from 13th Dec 2023 Federal Reserve issues FOMC statement
- The Decisions Regarding Monetary Policy Implementation Implementation Note issued September 20, 2023
- Economic projections from the December 12-13 FOMC meeting
- FOMC – Meeting calendars, statements, and minutes (2018-2024)
- CNBC News – Fed holds rates steady, indicates three cuts coming in 2024
- Reuters News – Fed flags end of rate hikes, sees drop in borrowing costs in 2024
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