Page 28 - Us Fed News Today

Financial markets are expecting the U.S. central bank to keep interest rates on hold at the end of a two-day policy meeting on Wednesday.

"Economic activity expanded at a strong pace in the third quarter," the U.S. central bank said in a policy statement after a two-day meeting in which officials unanimously agreed to leave the benchmark overnight interest rate in the 5.25%-5.50% range where it has been since July.

The US Fed says that the FOMC has sought to achieve maximum employment and inflation at the rate of 2% over the longer run

The Feds outlook for future policy actions and view on inflation will be critical, particularly in the backdrop of the recent surge in bond yields. For 2024, Fed officials had revised their interest rate projections, expecting the federal funds rate at 5.00-5.25% by the end of 2024.

Analysts are waiting for the US Fed’s October 31-November 1 meeting. Though the Fed is expected to keep interest rates unchanged, the focus will be on the central bank’s language

WASHINGTON: US Federal Reserve officials will likely leave their policy rate on hold at this week’s meeting thanks...

The Fed expects the rate to be around 5% by end-2024, and 4% a year later, compared to todays 5.25-5.50%. These levels are higher than expectations earlier this year. Further, the strong US growth figure for the September quarter, at 4.9%, provides little incentive for rate-cutting. This has driven US treasury yields higher and roiled world markets. Geopolitical uncertainty hasnt helped either. Indian markets are closely correlated with global markets.

“High-end consumption will probably continue to do well. Lower-end consumption is something that we have to watch out for if the festival season lends some kind of help. Till then it will remain on a wait and watch mode. Of course, the other thing that we keep discussing is the whole valuation challenge of the Indian market.”

The US Fed is likely to keep the interest rate unchanged this week despite having signalled one more hike, while the Israel-Hamas conflict could have ripple effects on the world economy.

The S&P 500 index faces selling pressure due to rising bond yields and interest rate concerns.