Forex and other markets news
11.04.2023, 22:09
Fed raises interest rates based on economic data
Fed raises interest rates based on economic data
New York Federal Reserve President John Williams said the Fed is likely to raise interest rates just one more time this year, with a 0.25% increase, a good start. But Fed policy will depend on the economic data the Fed receives.
“The fact that Fed officials are signaling just one more rate hike is a logical start. But I repeat once again that We must make decisions based on the information we receive. While we are paying attention to the credit conditions in the market. and signs of slowing inflation,” Williams said.
The U.S. Department of Labor will release the Consumer Price Index (CPI), a measure of inflation driven by consumer spending. Month of March tomorrow
Analysts expect the CPI to indicate that US inflation has yet to peak.
Analysts surveyed expect the headline CPI, which includes food and energy, to rise 5.2 percent in March year on year. slowing from 6.0% in February.
However, analysts expect the core CPI (core CPI), which excludes food and energy, to rebound 5.6% in March year on year. This is up from 5.5% in February.
If core CPI rebounds to 5.6% in March as expected It will be the first time since September 2022 that the core CPI has risen more than the previous month. And for the first time since 2021, the core CPI has rebounded more than the headline CPI.
Investors are also keeping an eye on the minutes of the March 21-22 Fed meeting that will also be released tomorrow. The Fed unanimously raised the short-term interest rate by 0.25% to a range of 4.75-5.00% at the meeting. Along with signaling that the cycle of interest rate hikes is almost over.
In their policy interest rate expectations (Dot Plot), Fed officials expect the Fed to raise interest rates as high as 5.1% this year, indicating that the Fed will only raise one more rate this year.
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