{"id":325110,"date":"2023-09-27T23:30:30","date_gmt":"2023-09-27T15:30:30","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=325110"},"modified":"2023-09-27T23:30:32","modified_gmt":"2023-09-27T15:30:32","slug":"federal-reserve-pauses-rate-hike-but","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/federal-reserve-pauses-rate-hike-but\/","title":{"rendered":"U.S. Fed pauses rate hike but…"},"content":{"rendered":"\n

Analysis and Recommendation<\/h2>\n\n\n\n

U.S. Federal Reserve keeps rates steady<\/strong><\/h3>\n\n\n\n

As expected, Fed’s Powell and Co. kept rates at the 5.25 to 5.50% range, with the U.S. Federal Reserve\u2019s chief citing that although monetary policy was making progress, there was still much to be done in the fight against inflation. Previous core inflation data remained more or less within consensus, hence the expectations that the Fed would continue to maintain its pause for his meeting. <\/p>\n\n\n\n

Nevertheless, the growth outlook in the US has remained on a solid trajectory, and Powell himself acknowledged this as he said that activity was \u201cexpanding at a solid pace,\u201d while job growth remained strong amidst a low unemployment rate. As such, strong underlying growth would likely continue to add upward price pressures unless tempered.<\/p>\n\n\n\n

Revisions to expectations<\/strong><\/h3>\n\n\n\n

With the hawkish pause already factored in, the main highlight in the market\u2019s eyes were the revisions made to economic forecasts. In-line with their beliefs regarding economic growth, GDP assumptions for 2023 and 2024 were revised upwards to 2.1% and 1.5%, from 1% and 1.1%. <\/p>\n\n\n\n

What was most attention grabbing however, were the changes made to the Fed\u2019s Dot Plot. While median Fed rates for 2023 were maintained at 5.6%, succeeding years would see increases across the board all the way until 2025. <\/p>\n\n\n\n

This would indicate that rates are likely to stay higher for much longer, and this is further confirmed by the Fed\u2019s inflation projections wherein they only see a full return to the target 2.0% by 2026 (as measured by Core PCE Inflation). Market expectations of an eventual rate cut were therefore pushed back, with the CME Fedwatch tool most recently showing that investors are pricing in a reduction in rates at the earliest by July 2024.<\/p>\n\n\n\n

<\/div>\n\n\n\n

This report is prepared by PinoyInvestor\u2019s partner broker below. Find out more about our partner brokers<\/a> and sign up to avail their complete trading brokerage services.<\/em><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Here\u2019s a commentary on an important issue or event affecting the stock market<\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-325110","post","type-post","status-publish","format-standard","hentry","category-special-reports","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"_links":{"self":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/325110","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/comments?post=325110"}],"version-history":[{"count":1,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/325110\/revisions"}],"predecessor-version":[{"id":325112,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/325110\/revisions\/325112"}],"wp:attachment":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/media?parent=325110"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/categories?post=325110"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/tags?post=325110"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}