The U.S. Federal Reserve is widely expected to leave interest rates unchanged for a third consecutive time as it concludes its last policy meeting of the year today (Dec. 13).
There is some speculation among economists that the American central bank could include language in its final statement of the year that indicates a coming pivot to monetary policy easing in 2024.
Markets are betting that interest rates have now peaked and are likely to decline in 2024 as inflation continues to decline in the U.S.
The latest reading for November showed that inflation declined to an annualized rate of 3.1%, down from 3.2% in October and below a peak of 9.1% reached in June 2022.
Futures traders are now betting that the U.S. Federal Reserve will begin cutting interest rates as soon as March 2024.
However, Fed Chair Jerome Powell is expected to continue talking tough on inflation, which he has repeatedly said remains too high and continues to be above the central bank’s 2% target.
The Fed chair is scheduled to speak to media at 2:30 p.m. EST today (Dec. 13), half an hour after the release of the central bank’s interest rate decision.
The U.S. central bank's benchmark interest rate, known as the “Fed Funds Rate,” is currently in a range of 5.25% to 5.50%, its highest level in nearly 20 years.
