/livecoverage/fed-september-meeting-rate-decision-powell-speech-today
The Federal Reserve is almost certain to hold the benchmark federal funds rate steady today. But that doesn't mean economists and investors won't be paying attention.
Focus will be trained on officials’ latest economic projections, which indicates how FOMC participants see the economy performing through year end and, more importantly, in 2024.
With inflation concerns lingering and the economy showing resilience, what the Fed signals in its so-called dot plot of rate forecasts will be key.
Standard Chartered’s Englander looks for the FOMC to remove one of the expected rate cuts from its 2024 forecast. He predicts the Fed will implement a rate cut in the first quarter of next year as the U.S. economy slows.
Vanguard’s senior economist, Josh Hirt, believes the Fed won’t start cutting its target rate until the second half of 2024.
“The next battle for the Fed will be fought on the grounds of ‘higher for longer,’” Uruci said. “For this message, the cleanest communication strategy will be using the 2024 dots and pushing back cuts gradually as the data reveal that economic activity and the labor market remain resilient.”
Many economists anticipate that the economic outlook for next year might improve marginally. The Fed's projections for growth in gross domestic product are also expected to be revised up, while unemployment-rate forecasts are likely to be revised down from the June figures. June’s Summary of Economic Projections, for example, projected unemployment would rise to 4.1% by the end of the year. It was 3.8% in August, and it is likely the September projections will be lowered to less than 4%.
The Federal Open Market Committee will issue its statement at 2 p.m. ET, followed by a press conference with Powell at 2:30 p.m.
