FOMC Press Conference Summary

January 31, 2024, 15:41 pm ET, BY Thomas H. Kee Jr- Editor, Stock Traders Daily| Editor: Thomas H. Kee Jr. (Follow on LinkedIn)

The FOMC left rates unchanged and their statement made it seem as if they were not considering rates cuts right now, and maybe not anytime soon.  The following notes (bullet points) summarize the information from the press conference, which offers more detail:

• · Policy is well into restrictive territory per Powell.
• · Increase in supply of workers.
• · Inflation still over 2%.  CORE PCE at 2.9%.
• · They want confidence that inflation is heading towards 2%.
• · Inflation expectations are 'well anchored.'
• · Policy likely at its peak for this tightening cycle.
• · If it stays that way rate cuts likely later this year.
• · Not considering cuts until confidence that 2% will be achieved.  Right now that is not the case.
• · Greater confidence =  continuation of 'good data.'  There has been 6 months of good inflation data
• · Not looking for 'period of weakness' to bring down inflation anymore.  Economy is strong and they want it to stay that way.
• · FOMC seems to think 3 rate cuts this year.
• · Timing based on gaining confidence.
• · Expect lower market rents to appear in inflation data soon.
• · Much of the disinflation came from opening of supply chains.
• · Labor mkt nearing normal.  Not quite there, but close.
• · Economy is broadly normalizing.  Might take a couple of years to get all the way back.
• · Greater risk to inflation is that it might stabilize at a level well above 2%.
• · Unlikely that committee would gain confidence by March Meeting.  Not likely to start cutting then.
• · Pace of run off is a key topic and expected to be key topic at March meeting.  They would think about reducing the pace of run off.
• · Repo will be discussed at the March Meeting
• · Expects this year to be a highly consequential year for Monetary Policy

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