tl;dr
The Federal Reserve is expected to maintain the interest rate at 5.25% to 5.5% after the FOMC meeting. JPMorgan and Goldman Sachs anticipate a rate reduction in July, while Wells Fargo predicts a cut in September. Bank of America suggests no reduction until December. There is a 44% chance for a rate...
The Federal Reserve is set to maintain the interest rate at 5.25% to 5.5% following the FOMC meeting. While JPMorgan and Goldman Sachs predict a rate reduction in July, Wells Fargo anticipates a cut in September. Bank of America, however, suggests no reduction until December.
Notably, there is a 44% chance for a rate cut in September, with Bank of America firmly believing it will not happen until December. Some Fed policymakers have even hinted at the possibility of an interest rate hike. Fed Chair Jerome Powell expressed a preference for sustained high-interest rates until inflation nears 2%, indicating that the Fed is unlikely to lower rates until then, according to Michael Gapen of Bank of America Corp.
The two-day FOMC meeting has sparked diverse forecasts from major industry players. JPMorgan and Goldman Sachs expect the first rate reduction in July, while Wells Fargo bets on September. Bank of America, on the other hand, doesn't expect the initial cut until December.
Reportedly, there is approximately a 44% chance for the Fed to cut interest rates in September, but Bank of America strongly believes the Fed will hold off until December. Fed Chair Jerome Powell hinted at a longer period of high-interest rates and the central bank's preference to keep policy restrictive "as long as needed." Bloomberg economists also anticipate a more hawkish stance from Powell, suggesting the possibility of no cuts or even a hike, contingent on inflation approaching 2%.
Michael Gapen, Head of US Economics at Bank of America Corp, emphasized a "wait-and-see" approach, indicating that policy needs more time to take effect before any rate adjustments.
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