$USINTR - A Month of Breath

Updated

The Federal Reserve left the target for the Fed Funds Rate
unchanged at 5%-5.25%, as expected, but signaled rates may go to 5.6% by Year-End if the Economy and Inflation do not Slow down more.
It is the first pause in the tightening campaign following ten consecutive hikes that lifted borrowing costs by 500bps to the highest level since September 2007.

Throughout Fed's announcement The Dollar Index
plunged to what can be said Wave C completed from A-B-C
Elliot Waves Correction
(attached ideas)

Have the markets priced in Inflation and Interest Rates ?

TRADE SAFE

*** NOTE that this is not Financial Advice !
Please do your own research and consult your Financial Advisor
before partaking on any trading activity based solely on this Idea .

Note

(live chart) 4Hr (TF)

*A-B-C Waves Completed

Note

July 26 marks the next date of Rate Hikes coming from Feds.
Consensus sits at 5.5%, a 0.25bsp increase from the previous one of 5.25% after a Month of Breath.

Note

officially at 5.5% as expected after a Month of Breath

Note

Yesterday (September 20/2023) Federal Reserve left U.S Interest Rates
unchanged at 5.5%.
Inflation concerns are still on the table as Powell stated .

Note

source: Federal Reserve

- The Federal Reserve kept the target range for the Federal Funds Rate at its 22-Year High of 5.25%-5.5% for a second consecutive time in November, reflecting policymakers' dual focus on returning Inflation to the 2% Target while avoiding excessive monetary tightening.
Policymakers emphasized that the extent of any additional policy tightening would consider the cumulative impact of previous Interest Rate Hikes,
the time lags associated with how monetary policy influences economic activity and inflation, and developments in both the economy and financial markets.
During the press conference,
Powell signaled that the September dot-plot showing the majority of participants forecasting one more rate hike this year may not be accurate anymore.
He also stated the FOMC had not discussed any rate cuts yet,
while the primary focus remains on whether the central bank will need to implement .

Note

The Federal Reserve kept the Fed Funds Rate steady at 5.25%-5.5% for a third consecutive meeting in December 2023,
in line with expectations but indicated 75bps cuts in 2024.
Policymakers said that recent indicators suggest that economic growth has slowed and job gains have moderated but remain strong, and the unemployment rate has remained low.
Inflation has eased over the past year but remains elevated. The central bank also published new projections.
GDP growth is expected higher this year (2.6% vs 2.1% in the September projection), but slightly lower in 2024 (1.4% vs 1.5%).
Also, PCE inflation was revised lower for both 2023 (2.8% vs 3.3%) and 2024 (2.4% vs 2.5%) as well as core PCE inflation which is seen at 3.2% in 2023 (vs 3.7%) and 2.4% (vs 2.6%) next year.
Unemployment projections remained steady at 3.8% for 2023 and 4.1% for next year.
The so-called dot plot showed the median year-end 2024 projection for the federal funds rate fell to 4.6% from 5.1% seen in September.

source: Federal Reserve

plunging & rocking

Note

The Federal Reserve kept the Fed funds rate unchanged at a 23-Year High of 5.25%-5.5% for a fourth consecutive meeting in January 2024, in line with expectations.
Policymakers added that they do not expect it will be appropriate to reduce the rates until they have gained greater confidence that inflation is moving sustainably toward 2%.
During the press conference,
Chair Powell said it will be appropriate to begin reducing rates sometime this year but the central bank will continue to make decisions on a meeting by meeting basis and he doesn't think a March cut is likely.
Meanwhile,
the Fed removed reference to further rate hikes from the statement, saying that the risks to achieve its employment and inflation goals are moving into better balance, but noting it would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of such goals.
The central bank noted that inflation has eased over the past year but remains elevated.

source: Federal Reserve

Note

The Federal Reserve left the fed funds rate steady at a 23-year high of 5.25%-5.5% for a fifth consecutive meeting in March 2024, in line with market expectations.
Policymakers added that they do not expect it will be appropriate to reduce the target range until they have gained greater confidence that inflation is moving sustainably toward 2%.
Still, central bankers still anticipate cutting interest rates three times this year.

source: Federal Reserve

Note

source: Federal Reserve

- The Federal Reserve kept the target range for The Federal Funds Rate unchanged at 5.25%-5.50% during its May meeting for the Sixth Consecutive time, as ongoing inflationary pressures and a tight labor market indicate a stall in progress toward bringing inflation back down to its 2% target this year.
Policymakers acknowledged that while inflation has moderated over the past year, it remains elevated, and there has been a notable lack of further progress towards achieving the central bank's goal in recent months.
Still, Chair Powell stated that he does not foresee a hike as likely and believes that the current policy is sufficiently restrictive to achieve the 2% inflation target.
The Fed has also declared its intention to reduce the speed of its quantitative tightening starting from June 1st, an adjustment that will involve cutting the maximum amount of Treasury securities being removed from the balance sheet by over 50%, down to $25 billion monthly from the previous $60 billion.

Note

(June/2024)

source: Federal Reserve
The Federal Reserve left The Fed Funds target range steady at 5.25%-5.50% for a 7th consecutive meeting in June 2024, in line with forecasts.
Policymakers do not expect it will be appropriate to reduce rates until they gained greater confidence that inflation is moving sustainably toward 2%. Meanwhile, the dot plot showed policymakers see only one rate cut this year and four reductions in 2025.
Back in March, the Fed was seeing three cuts in 2024 and three in 2025.
The Fed made no revisions to GDP growth projections and still sees the economy expanding 2.1% in 2024, 2% in 2025 and 2026.
Meanwhile, PCE inflation was revised higher for 2024 (2.6% vs 2.4% in the March projection) and next year (2.3% vs 2.2%) but was kept at 2% for 2026.
Core PCE inflation was also revised up to 2.8% in 2024 (vs 2.6%) and 2025 (2.3% vs 2.2%) but was kept at 2% for 2026. The unemployment rate is projected at 4% for 2024, the same as expected in March, but is seen slightly higher at 4.2% in 2025 (vs 4.1%). source: Federal Reserve

Note

8 Months of Breaths
source : Federal Reserve of United States

The Federal Reserve kept the Federal Funds Rate at a 23-year high of 5.25%-5.50% for the 8th consecutive meeting, as expected.
Still, the new statement signaled the first cut is closer by acknowledging the recent rise in the jobless rate and emphasizing that the central bank is now equally focused on the full-employment aspect of their dual mandate.

Mr_J__fx

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