The market believes that there will be no movement in interest rates and they will remain between 5.25 and 5.5%, but the organization is at the crossroads between good economic data and market difficulties.
The US Federal Reserve (Fed) is facing a key question: has the time come to end interest rate hikes?
The consensus among investors seems to be that the central bank will decide at its meeting today to keep rates in their current range, between 5.25 and 5.5%, according to the FedWatch tool of the CME group.
For now, “the low trend (of inflation) is not relevant and should allow the Fed to withdraw from considering further increases, and perhaps consider some early restraints. still in the late spring / summer 2024”, according to the analysis of Loomis Sayles, a specialist manager at Natixis Investment Managers.
The group believes that the Federal Reserve “has pulled back somewhat in appreciating longer-dated US Treasuries and appears to be becoming more cautious about excessive tightening.”
Cristina Gavín Moreno, head of fixed income at Ibercaja Gestión, was more cautious, assuring in a comment before the two-day Fed meeting that “the change in the monetary policy bias of the Federal Reserve is far away and not “we probably. to see a rate cut before the end of 2024.”
Since the last monetary policy meeting in September, where central bankers also left rates unchanged, future data showed stronger-than-expected employment growth, stronger than of the expected economic growth and only a slow moderation of inflation that, at 3.4% in September according to the preferred indicator of the Fed, remains above the target.