Reserve

FOMC

Core

2024

<h2 id="key-points">Key Points</h2>
<ul>
 <li>The US Federal Reserve paused interest rate hikes today at 5.25% – 5.50%.</li>
 <li>The decision comes after the latest CPI report released today.</li>
</ul>
According to the latest reports following the <a href="https://crypto.ro/en/news/bitcoin-maintains-stability-as-federal-reserve-acknowledges-modest-inflation-goal-progress/" rel="noopener noreferrer nofollow">FOMC meeting</a>, the interest rates remain unchanged, in line with market expectations.
Barron’s <a href="https://www.barrons.com/livecoverage/fed-rates-meeting-powell-speech-today" rel="noopener noreferrer nofollow" target="_blank">reports</a> that the Federal Reserve’s policy-making committee voted to keep the benchmark interest rate steady after today’s meeting.
Here is a <a href="https://x.com/KobeissiLetter/status/1800952017784856813" rel="noopener noreferrer nofollow" target="_blank">summary</a> of the Fed’s decision:
<ul>
 <li>The Fed leaves rates unchanged for the 7th straight meeting.</li>
 <li>Officials raise the 2024 inflation forecast from 2.4% to 2.6%.</li>
 <li>The Median forecast shows 100 bps of rate cuts in 2025.</li>
 <li>The Fed said that inflation has eased, but “remains elevated.”</li>
 <li>The Median 2024 Core PCE inflation estimate is up from 2.6% to 2.8%.</li>
</ul>
According to official notes, the collective forecast for interest rates now implies only one quarter-point cut by the end of 2024, this being a significant shift from earlier this year.
In March, the Fed penciled a total of three quarter-point cuts.
The FOMS’s policy statement that was published today was barely changed from May to June. Reports reveal that officials removed a section detailing plans to slow the pace of its balance-sheet reduction this month.
Barron’s notes that there was one wording change higher up, acknowledging that some progress is being made in bringing inflation back to the Fed’s 2% annual target.
<h2 id="the-cpi-report-released-today-shows-an-eased-inflation">The CPI report released today shows an eased inflation</h2>
The<a href="https://crypto.ro/en/news/bitcoin-above-69k-following-new-cpi-report/" rel="noopener noreferrer nofollow"> CPI data</a> revealed today showed an eased inflation – an increase of 3.3% from a year ago, remaining unchanged in May.
This is a 0% month-over-month inflation for the first time since August 2022.
Core CPI inflation<a href="https://x.com/KobeissiLetter/status/1800868333182738748" target="_blank" rel="noopener noreferrer nofollow">&nbsp;fell</a>&nbsp;to 3.4%, below expectations of 3.5%.
This weaker inflation could&nbsp;<a href="https://x.com/KobeissiLetter/status/1800655893249351813" target="_blank" rel="noopener noreferrer nofollow">open the door</a>&nbsp;to a July rate cut by the Fed, according to analysts.
According to The Kobeissi Letter, an industry-leading commentary on the global capital markets, while the CPI inflation is at 3.3%, <a href="https://x.com/KobeissiLetter/status/1800889115203838047" rel="noopener noreferrer nofollow" target="_blank">inflation is higher</a> in many basic necessities.
<ul>
 <li>Car Insurance Inflation: 20.3%</li>
 <li>Transportation Inflation: 10.5%</li>
 <li>Hospital Services Inflation: 7.2%</li>
 <li>Car Repair Inflation: 7.2%</li>
 <li>Electricity Inflation: 5.9%</li>
 <li>Homeowner Inflation: 5.7%</li>
 <li>Rent Inflation: 5.3%</li>
 <li>Food Away From Home Inflation: 4.0%</li>
</ul>
They also note that inflation has been above 3% for 38 consecutive months now.

US Federal Reserve Pauses Interest Rate Hikes Following Today’s CPI Report

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