Investing.com — Wall Street futures head higher after the Federal Reserve reaffirmed plans for three interest rate cuts this year. The Swiss National Bank became the first major central bank to cut interest rates, and more central banks are due. Reddit is set to start trading, having been priced at the top of its IPO range.
The U.S. Federal Reserve held its benchmark overnight borrowing rate in a range between 5.25%-5.5% on Wednesday, but reaffirmed plans for three quarter-percentage point cuts by the end of 2024.
These would be the first reductions since the early days of the Covid pandemic in March 2020, and the intentions to cut have been repeated despite slower-than-expected progress towards the U.S. central bank's 2% inflation target and robust economic growth.
The Fed's new policy statement described inflation as remaining «elevated,» and updated quarterly economic projections showed the personal consumption expenditures price index excluding food and energy, the central bank’s favorite inflation gauge, rising at a 2.6% rate by the end of the year, compared to 2.4% in the projections issued in December.
Additionally, the officials also lifted their expectations for annualized real GDP to show 2.1% growth in the March projection, up from 1.4% in December.
“Our interpretation is that Chair Powell and a narrow majority of the Committee feel strongly about not delaying cuts for too long and are targeting the June FOMC meeting for the first cut,” analysts at Goldman Sachs said, in a note dated March 20.
“In fact, the somewhat higher inflation forecast—which is now 0.2pp above our own forecast of 2.4%—lowers the bar slightly for incoming inflation data to meet the FOMC’s expectations and keep a June cut on track. We
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