Fed Maintains Interest Rates, Eyes Potential Cuts


zForex.com Representative
Last night, the Federal Reserve (Fed) adhered to expectations by keeping its policy interest rate unchanged within the range of 5.25-5.50%.

According to the Fed's projections, there is a prospect of a cumulative 75 basis point interest rate reduction next year.
The likelihood of an interest rate cut as early as March in the US interest rate futures has surged to around 73% (previously: 40%).

Furthermore, the monetary policy statement signals a deceleration in inflation throughout the year, with revised forecasts dropping from 3.3% to 2.8% for this year, 2.5% to 2.4% for 2024, and 2.2% to 2.1% for 2025.

Note: The Fed's inclination towards lower interest rates, in theory, may induce a decline in the Dollar Index, potentially rekindling inflation. Hence, taking action before June might unsettle the equilibrium slightly.