CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Fed published monetary policy report, offering insights into the economic and inflation outlook 📃

18:53 1 March 2024

 

The United States Federal Reserve (Fed) has released a new monetary policy report, offering insights into the current economic climate, inflation, and labor market conditions. It highlights, among other things, the potential impact of AI on increasing worker efficiency and, consequently, earnings; this seems to be another argument for the 'higher for longer' approach. It seems unlikely that without any 'emergency state' situation in the economy, the Fed would aim for rate cuts again to the level of 0.5%. Here are the key points from the report:

Start investing today or test a free demo

Open account Try demo Download mobile app Download mobile app

 

Macroeconomic Outlook and Inflation: The report highlights a notable softening in labor demand and improvements in labor supply, which are expected to contribute to a further slowing in core services price inflation. The Fed observes a softening in market rents, pointing to a continued deceleration in housing services prices over the coming year. Additionally, the rapid adoption of new technologies like AI and robotics could potentially boost productivity growth.

Wages and Labor Market: The labor market remains relatively tight, with easing demand and an increasing supply. Wage gains have slowed down in 2023 but continue to exceed the pace consistent with 2% inflation. The report also notes strong labor market conditions and trends like work from home, which have supported housing demand despite higher rates.

Fed Interest Rate Projections: The Fed underscores its commitment to achieving a 2% inflation rate, stating it is not appropriate to reduce the target range until there is greater confidence that inflation is moving sustainably toward this goal. The report suggests that while inflation has slowed, it remains elevated. The next interest rate-setting meeting is scheduled for March 19-20, with expectations of maintaining the current rate, followed by potential rate cuts in the coming months as inflation shows signs of returning to the 2% target.

Financial Stability and Future Outlook: The report mentions "notable" vulnerabilities in financial stability, though the acute stress in the banking system has receded since last spring. The Federal Open Market Committee (FOMC) does not anticipate reducing the target range until greater confidence is gained that inflation is sustainably moving towards 2%. The report, serving as a precursor to Jerome Powell's congressional testimony, is expected to address lawmaker questions on the Fed's policy stance and expectations for easing. The Fed's upcoming decisions on interest rates will be closely watched, especially given the election year context.

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.

Back
Xtb logo

Join over 1 Million investors from around the world

We use cookies

By clicking “Accept All”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.

This group contains cookies that are necessary for our websites to work. They take part in functionalities like language preferences, traffic distribution or keeping user session. They cannot be disabled.

Cookie name
Description
SERVERID
userBranchSymbol cc 2 March 2024
adobe_unique_id cc 1 March 2025
test_cookie cc 1 March 2024
SESSID cc 9 September 2022
__hssc cc 1 March 2024
__cf_bm cc 1 March 2024
intercom-id-iojaybix cc 26 November 2024
intercom-session-iojaybix cc 8 March 2024

We use tools that let us analyze the usage of our page. Such data lets us improve the user experience of our web service.

Cookie name
Description
_gid cc 9 September 2022
_gat_UA-22576382-1 cc 8 September 2022
_gat_UA-121192761-1 cc 8 September 2022
_ga_CBPL72L2EC cc 1 March 2026
_ga cc 1 March 2026
AnalyticsSyncHistory cc 8 October 2022
af_id cc 31 March 2025
afUserId cc 1 March 2026
af_id cc 1 March 2026
AF_SYNC cc 8 March 2024
__hstc cc 28 August 2024
__hssrc

This group of cookies is used to show you ads of topics that you are interested in. It also lets us monitor our marketing activities, it helps to measure the performance of our ads.

Cookie name
Description
MUID cc 26 March 2025
_omappvp cc 11 February 2035
_omappvs cc 1 March 2024
_uetsid cc 2 March 2024
_uetvid cc 26 March 2025
_fbp cc 30 May 2024
fr cc 7 December 2022
muc_ads cc 7 September 2024
lang
_ttp cc 26 March 2025
_tt_enable_cookie cc 26 March 2025
_ttp cc 26 March 2025
hubspotutk cc 28 August 2024

Cookies from this group store your preferences you gave while using the site, so that they will already be here when you visit the page after some time.

Cookie name
Description
personalization_id cc 7 September 2024
UserMatchHistory cc 8 October 2022
bcookie cc 8 September 2023
lidc cc 9 September 2022
lang
bscookie cc 8 September 2023
li_gc cc 7 March 2023

This page uses cookies. Cookies are files stored in your browser and are used by most websites to help personalise your web experience. For more information see our Privacy Policy You can manage cookies by clicking "Settings". If you agree to our use of cookies, click "Accept all".

Change region and language
Country of residence
Language