US Federal Reserve decided to hold rates unchanged at 4.5% in line with 4.5% projected on Wall Street. Indices on Wall Street gain after the decision; US100 rises 1%.
- Fed Median Rate forecast: 3% vs 3.125% exp. and 3% previously
- Fed Median Rate forecast (1yr): 3.375% vs 3.375% exp. and 3.875% previously
- Fed Median Rate forecast (2yr): 3.125% vs 3.125% exp. and 3.375% previously
Fed signals that beginning in April Fed will slow pace of balance sheet runoff. Monthly Treasury redemption cap will decline to $5 billion from $25 billion; monthly redemption cap on mortgage-backed securities is unchanged at $35 billion. Fed vote on policy included one dissent from Christopher Waller, who supported no change on policy rate but preferred no change to balance sheet runoff. Median view of Fed Funds Rate at end-2025 3.9% vs 3.9% previously. Fed officials' median view of Fed Funds Rate in longer run 3.0% (prev 3.0 %)
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appFOMC median forecast shows 50 BPS of rate cuts in 2025 to 3.9% and 50 BPS more in 2026. . Uncertainty around economic outlook has increased. Fed reduced 2025 growth projection and marks up inflation. Now the Fed median forecast shows 2025 GDP at 1.7%, vs 2.1% in December, while median 2025 unemployment projection rises to 4.4%. Fed projections show 4 of 19 officials see no cuts in 2025, 4 see one cut, 9 see 2 cuts, 2 see as much as 3 cuts.
Overall, the market reaction shows that the FOMC statement is dovish. Futures price in more than 62% chance for Fed rate cuts in June vs 57% probability before. Now Wall Street await for the chair Powell speech scheduled at 6:30 PM GMT.
Source: xStation5
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
