At 2 a.m. Beijing time on December 14, the Federal Reserve announced that it would maintain the target range of the federal interest rate at 525%-5.5% unchanged, remaining at a 22-year high, in line with market expectations. This is the fourth pause in the Fed's current rate hike cycle, after June, September and November. Since the Fed launched the current interest rate hike cycle in March 2022, the cumulative rate hike has reached 525 basis points, and the December interest rate decision suggests that the rate hike cycle has come to an end.
The FOMC participant's assessment of the appropriate monetary policy: the midpoint of the Federal** interest rate target range or target level.
The dot plot released by the Federal Reserve on the same day released a ** signal.
Specifically, for the 2024 federal interest rate, there are 2 Federal Reserve interest rates that will remain at 525%-5.5%, and the average interest rate of the 17 Feds will fall to 525% or less, and 1 of them** the interest rate will be reduced to less than 4%. 4.The median interest rate expectation of 6% means that the Fed is likely to cut rates three times next year.
For the 2025 Fed rate, the Fed rate will be at 525%-5.5%, and the other 17 people** interest rate will be located at 45% or less, 2 of whom are expected to be below 30%。
It is worth mentioning that the ** of the dot plot may not be accurate, for example, the dot plot released at the interest rate meeting in September this year hinted that there may be another rate hike in 2023, but the Fed has always paused the pace of interest rate hikes since then.
The November meeting also released expectations for inflation, unemployment, and economic growth.
Compared to September, the Fed raised the growth rate of the U.S. economy in 2023 to 26% (2 in September.)1%), while lowering it to 14% (September ** value 1.)5%), keeping it at 1 for 2025**8% (1 September** value.)8%), and raised it to 1. for 2026**9% (1 September** value.)8%）。
The Federal Reserve** unemployment rate this year is 38% (September ** value 3.)8%) and maintain 4 for 2024**1% (September** value 4.)1%）。Lowered the PCE (Personal Consumption Expenditures) inflation forecast for this year to 28% (September ** value 3.)3%), while lowering it to 2024** to 24% (2 in September.)5%）。Core PCE inflation expectations for this year have been lowered to 32% (September ** value 3.)7%), while lowering it to 2024** to 24% (2 in September.)6%）。
On the day of the Federal Reserve's December interest rate decision, the three major U.S. stock indexes all closed higher, and the Dow rose 140%, the Nasdaq rose 138%, and the S&P 500 rose 137%。
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