Fed expected to keep interest rates higher for longer amid stubborn inflation
foxbusiness.comCAZ Investments Chief Investment Officer Christopher Zook weighs in on the Fed's handling of the economy as rate cut expectations plummet, Japan's Yen and tech earnings.
Just a few months ago, Wall Street was confident that May would mark the beginning of a barrage of interest rate cuts by the Federal Reserve.
But a string of hotter-than-expected inflation reports at the beginning of the year has poured cold water on those expectations, and the debate has gradually shifted from how many times the Fed will cut rates this year, to whether it will trim them at all.
Fed officials are widely expected to hold interest rates steady at a range of 5.25% to 5.5%, the highest level in 22 years, and make only minor changes to their policy statement at the conclusion of their two-day meeting on Wednesday.
«Despite evidence that economic growth is beginning to slow, the Federal Reserve isn’t as close to cutting interest rates as they thought they might be at their last meeting in March,» said Greg McBride, chief financial analyst at Bankrate. «Inflation has continued to run hot and there is no compelling need for the Fed to cut interest rates until they’re comfortable with where inflation is headed.»
JAMIE DIMON WARNS INFLATION, INTEREST RATES MAY REMAIN ELEVATED
Federal Reserve Chairman Jerome Powell speaks during a news conference following a Federal Open Market Committee meeting in Washington, D.C., on March 22, 2023. (Photographer: Al Drago/Bloomberg via Getty Images / Getty Images)
However, investors are even more laser-focused on what Fed Chair Jerome Powell may signal comes next for the central bank during his post-meeting press conference.
Updated quarterly projections laid out after the Fed's March meeting show that a
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