Fed meeting today: rates remain unchanged and three cuts are expected within the year

As expected the day before, the Federal Reserve decided to leave interest rates unchanged at the end of the March meeting.
We therefore remain in the 5.25-5.50% range as decided last July.
As anticipated by Powell in the conference but also by reading the projections, the scenario of three cuts during 2024 is plausible.
In the end, therefore, Powell and the governors, between the risk of cutting rates too early and that of cutting them too late, opted also this time on the second solution.
The official Fed note shows that the data on the US economic situation are still not very encouraging and although inflation has eased in the last year, it remains high and far from the target of 2%.
“The Committee believes that it will not be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably towards 2%,” reads the official note.
And again: «When considering any adjustments to the target range for the federal funds rate, the Committee will carefully evaluate incoming data, the evolving outlook and the balance of risks.
The Committee believes that it will not be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably towards 2 percent." Powell at the conference, speaking about inflation, said that it has eased in recent times but still remains high and far from the 2% target.
For this reason the path to follow is still uncertain but the president looks to the future with confidence as the risks are shifting towards a better balance.
“We believe our monetary policy rate is likely to be at its highest and if the economy evolves as expected, it will be appropriate to cut rates this year,” he announced.
So no changes at the moment.
Analysts expect a rate cut at the June 12 meeting, if the data are obviously comforting.
Meanwhile, the markets are reacting well after the March decision and the glimmer of a start to the decline during 2024.
Minimal change to long-term projections.
The macroeconomic projections up to 2026 and the dot plots have also been published.
As for rates, governors appear to have taken a slightly more restrictive stance.
For 2024 the forecast indicates a decline in interest rates to 4.6%.
A forecast unchanged from last time.
For 2025 and 2026, however, there seems to be less confidence because next year the rate forecast has been revised upwards from 3.6% to 3.9%.
The same goes for 2026 when it goes from 2.9% to 3.1%.
In this regard, macroeconomic data, inflation for 2024 is forecast at 2.4%, unchanged compared to the last projections and therefore quite close to returning to 2%.
Unemployment falls from 4.1% to 4% while GDP is expected to grow by the end of the year and goes from 1.4% to 2.1% compared to the latest forecasts.
Fed meeting today: live updates 8.11pm Powell: «We are looking for data that gives us greater confidence» «We are looking for data that confirms what we saw at the end of last year and that gives us greater confidence in inflation which will fall to 2%", Powell's words.
7.44pm Powell: «We will cut rates this year».
Important words of confidence from Powell who announced at the press conference that during 2024 there will probably be the long-awaited rate cut.
“We will probably cut rates at some point this year,” he told reporters in attendance.
7.37pm Powell in conference: «Inflation subdued but still high» «Inflation has eased considerably, but is still too high.
For this reason the path to follow is still uncertain.
However, the risks are moving towards a better balance", began Fed President Powell at the press conference.
7.31pm Powell's press conference begins The president of the Federal Reserve is at a press conference.
Waiting for his words.
19:29 Inflation unchanged at 2.4% The macroeconomic forecasts published by the Federal Reserve indicate inflation unchanged in 2024 at 2.4%.
Unemployment falls from 4.1% to 4% while GDP is expected to grow by the end of the year and goes from 1.4% to 2.1% compared to the latest forecasts.
19:29 The dots confirm the cuts expected for this year.
The macroeconomic projections and dot plots up to 2026 have also been published.
For this year, the rate forecast by December 2024 remains unchanged at 4.6%.
Slight increase in 2025 compared to previous projections: from 3.6% to 3.9%.
The same goes for 2026 when it goes from 2.9% to 3.1%.
7.17pm Fed: «It is not appropriate to reduce the rate until there is greater confidence that inflation is moving towards 2%» «When considering any adjustments to the target range for the federal funds rate, the Committee will carefully evaluate the incoming data, the evolving outlook and the balance of risks.
The Committee believes that it will not be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably towards 2%", reads the official Fed note.
19:12 Fed official note: inflation attenuated but still high «Recent indicators suggest that economic activity has expanded at a rapid pace.
Job growth remained strong and the unemployment rate remained low.
Inflation has eased over the past year but remains high.
The Committee seeks to maximize employment and inflation at a rate of 2% over the long term.
The Committee believes that the risks associated with achieving employment and inflation targets are reaching a better balance.
The economic outlook is uncertain and the Committee remains very attentive to the risks of inflation", this is what we read in the official note published by the Federal Reserve.
7.00pm Federal Reserve: rates remain unchanged Federal Reserve decision published.
At the end of the two-day consultation it was decided to maintain interest rates in the 5.25-5.50% range as decided last July.
Now waiting for Powell's words.
18:43 Weak closing for European stock markets As in the United States, European stock markets were also affected today by the uncertainty surrounding the Federal Reserve's decision.
Almost all the stock markets closed with little movement.
The Milan Stock Exchange closed with little movement at +0.09%.
London ends down 0.1%, Paris drops by 0.48% while Frankfurt rises by 0.15%.
6.30pm Weak session on Wall Street awaiting the Fed decision Weak opening for the New York stock exchange awaiting the decision on rates but above all on the Federal Reserve's projections.
At the start of trading on Wall Street, the Dow Jones lost 0.1% while the S&P 500 was just above parity, marking +0.06%.
The Nasdaq advanced by 0.16% to 16,192.5 points.
read also Why stock markets grow despite the new outlook on rates