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Saturday, May 18, 2024

Federal Reserve Likely to Hold Rates Amid Persistent Inflation

Key Takeaways:

  • The S&P 500 Fell 1.78% today, the market could be pricing in the Federal Reserve’s decision.
  • CME Group’s FedWatch tool currently indicates a 99.5% probability that the Federal Reserve will keep interest rates unchanged at the upcoming meeting.

Market Data and Expectations

The Federal Reserve is set to convene for its next meeting tomorrow, May 1, 2024, with traders and investors expecting the central bank to maintain interest rates at their current level of around 5.5%. This expectation comes with the latest inflation data showing that core consumer prices in the United States remain above the Fed’s target of 2% in March.

The S&P 500 Fell 1.78% today, the market could be pricing in the Federal Reserve’s decision:

S&P 500 1-Minute Price Data

The Core PCE Price Index came in at 2.8% year-over-year, and above the 2.6% consensus. For month-over-month PCI data, it came in at 0.3%, matching the previous readings and consensus expectations. Inflation still remains around the same as it was last month, this could lead to the FED holding rates for longer.

In their previous meeting on March 20, 2024, the Federal Reserve decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent.

CME Group’s FedWatch tool currently indicates a 99.5% probability that the Federal Reserve will keep interest rates unchanged at the upcoming meeting. This high level of certainty among market participants reflects the belief that the central bank will prioritize monitoring the impact of its previous rate hikes on the economy and inflation before making any further adjustments.

Source CMEGroup: https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
Lazarus
Lazarushttps://ljlnews.com
Publisher and editor of LJLNews. I am a Stock Market enthusiast, with an interest for politics. I hope you enjoy reading the articles! Contact me at: Lazaruslucas@ljlnews.com

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