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The United States (US) Federal Reserve (Fed) announced on Wednesday that it elected to hold steady the policy rate, the federal funds rate, remaining at a target range of 4.25%-4.5% following the conclusion of its May meeting. This decision was broadly anticipated by financial markets and analysts alike, aligning with prevailing expectations.
Follow our live coverage of the Fed monetary policy announcements and the market reaction.
Developing story, please refresh the page for updates.
This section below was published at 18:00 GMT to cover the Federal Reserve’s policy decisions and the immediate market reaction.
- The Federal Reserve is expected to leave the policy rate unchanged for the third consecutive meeting.
- Fed Chairman Powell will speak on the policy outlook in a press conference.
- The US Dollar could stay resilient against its rivals if the Fed keeps its focus on the inflation outlook.
The United States (US) Federal Reserve (Fed) has announced its monetary policy decisions following the May policy meeting on Wednesday. Market participants widely anticipated that the US central bank would maintain policy settings without alteration for the fourth consecutive meeting. This follows a prior adjustment where the interest rate was decreased by 25 basis points (bps) to a range of 4.25%-4.5% in December of the previous year.
Analysis of the CME FedWatch Tool indicates that investors currently perceive a negligible probability of a rate cut occurring in May. Furthermore, the tool suggests a roughly 30% probability of a 25 bps reduction being implemented in June. Consequently, market participants will be closely scrutinizing the nuances within the policy statement, as well as the subsequent commentary from Fed Chairman Jerome Powell during the post-meeting press conference. The focus will be on identifying any fresh indications regarding the anticipated timing of the next potential rate cut. Investors are particularly interested in assessing the Fed’s evolving perspective on inflation, economic growth, and labor market conditions, as these factors will heavily influence the central bank’s future policy decisions. Recent economic data, including inflation figures and employment reports, will likely play a crucial role in shaping market expectations and the Fed’s communication strategy.
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