No surprise from Federal Reserve who left interest rates stop at the intervalor 4.25-4.50%, By affirming that the economic activity has continued to expand at a sustained pace, the unemployment rate has stabilized at a low level in recent months and the conditions of the labor market remain solid, while the reduction remains “quite high”.
“The uncertainty about economic perspectives has increased – reads the declarations issued at the end of the meeting – the Committee is attentive to the risks peither both parts of its double mandate “.
Fed, unchanged rates
“We don’t have to is in a hurry to change our position of monetary policy and we are well positioned to wait for greater clarity, “said the president of the Fed, Jerome Powell, in the press conference that followed the decision to leave the rates unchanged and slow down the rhythm of the quantitative tightening starting from April.
“The participants (at the FOMC, editor’s note) expressed their individual evaluations of an appropriate path for the rate on the basis of what each participant believes to be the most probable scenario for the future – he told – and, I admit, is a demanding exercise at this moment. In the light of a significant uncertainty, the median participant provides that the appropriate level of the rate will be 3.9 percent at the end of this year and 3.4 percent at the end of next yearunchanged compared to December. While these individual forecasts are always subject to uncertainty, uncertainty today is unusually high “.
“High uncertainty”
“As expected, the Fed has adopted a cautious tone in the meeting of this month, remaining waiting for clarifications on the growth prospects and the changes to commercial policy. The revisions of the projections of the members of the FOMC leave to some extent the feeling of a” stagflation “atmosphere, with growth and inflation forecasts that move in opposite directions. For the moment the Fed is in” Wait and See “mode, to check if the slowdown of growth will be transformed into something more serious “, this is the comment DThe Whitney Watson, Global Co-Head and Co-Chief Investment Officer of Fixed Income and Liquidity Solutions of Goldman Sachs Asset Management.
There Fed keeps rates unchangedas well as expectations on the future path, despite the keyword of this meeting should be “uncertainty”: it is the comment of Bret Kenwell, Us Investment Analyst of Etoro,
The comments
Investors – The analyst continues – they could wonder Because the Fed still includes two rates cuts in 2025, even if the latest economic forecasts include a reduction in GDP growth and an increase in inflation expectations for 2025, factor on which, by admission of the Fed itself, the rates have a central role. In this sense, the potential duties of April 2 are looming as a threat.
For the moment, “The actions are on the basis of this newssince the titles continue to recover from a condition of evident hypervented. In the days and weeks to come, investors should keep an eye on the returns of the Treasury at 10 years. If the Treasury yields continue to go down, we could witness a further rally of dividend titles, utilities and other assets sensitive to returns. Furthermore, if the technological sector continues to bounce – even if it is only A short -term rebound – could feed a wider general rebound of US securities, given the drop disproportionate that we recorded in this group “.
