This week marks a crucial time for the US economy as the Federal Open Market Committee (FOMC) meets to discuss and decide on the next steps regarding interest rates and monetary policy.
Breakdown of the key events to watch:
Date & Time: Wednesday, December 13th, 2023
Events:
- FED Interest Rate Decision: 2:00 PM ET - This is the most anticipated event of the meeting. The FOMC will decide whether to raise interest rates, keep them unchanged, or even lower them. The decision will significantly impact the US economy and global financial markets.
- FED FOMC Statement: 2:00 PM ET - Following the interest rate decision, the FOMC will release a statement explaining its rationale and future plans for monetary policy. This statement will provide valuable insights into the FOMC's current economic outlook and their approach to managing inflation and unemployment.
- FED FOMC Economic Projections: 2:00 PM ET - Alongside the statement, the FOMC will release updated economic projections, including forecasts for GDP growth, unemployment, and inflation. These projections will offer further clues about the FOMC's assessment of the economy and their expectations for its future trajectory.
- FED Chair Powell Speaks: 2:30 PM ET - Following the release of the statement and projections, Federal Reserve Chair Jerome Powell will hold a press conference to elaborate on the FOMC's decisions and answer questions from reporters. This press conference will be closely watched by investors and analysts seeking clarification and further details about the FOMC's outlook.
What to Expect:
- Interest Rate Decision: While there is no consensus among economists, most analysts expect the FOMC to raise interest rates by 50 basis points. This would be the seventh interest rate increase in 2023, reflecting the FOMC's ongoing efforts to combat inflation.
- FOMC Statement: The statement is expected to express concerns about rising inflation and emphasize the FOMC's commitment to bringing inflation back down to its 2% target. The statement may also acknowledge the slowdown in economic growth and offer reassurances about the FOMC's commitment to maintaining a healthy and stable economy.
- Economic Projections: The updated economic projections are likely to show lower forecasts for GDP growth in 2024, reflecting the impact of higher interest rates. However, the projections are also expected to show a gradual decline in inflation, moving closer to the FOMC's target.
- Powell's Press Conference: Powell will likely be questioned about the FOMC's balancing act of combating inflation without triggering a recession. He may also provide more details about the FOMC's plans for future interest rate hikes and monetary policy adjustments.
Overall, the FOMC meeting this week is highly anticipated and will likely have significant implications for the US economy and global financial markets.