The #fomc meeting concluded yesterday and , as expected, the fed took a pause and kept official interest rates at 5-5.25%. However, there were several unexpected outcomes worth mentioning. (1) even though the decision was unanimous, there were 3 members of the committee (and J Powell was probably one of them) that wanted more hikes. That’s reflected in the dot plot below. (2) the committee is forecasting no recession for 2023, but mentioned that unemployment would rise 0.4% from current levels, which is historically associated with recessions. (3) over the last 30 years, only once on July ‘94 the Fed paused after 3 hikes and then continued hiking. The other 2 instances they’ve paused, the next move was either no move or a cut. If inflation continues its current path, we could have a 2% handle on #cpi by August to conclude this tightening cycle.
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