US Federal Reserve holds interest rates steady – Dec 2023

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.