US Federal Reserve holds steady
The US Federal Reserve (the “Fed”) [link] decided to hold its interest rates steady for the 5th consecutive meeting. The Fed released its new economic projections which show that it expects fewer rate cuts between now and the end of 2026. A majority of Fed policymakers expect to see three rate cuts in the remainder of FY24, […]
Tomas Kauer - News Moderator 
The US Federal Reserve (the “Fed”) [link] decided to hold its interest rates steady for the 5th consecutive meeting. The Fed released its new economic projections which show that it expects fewer rate cuts between now and the end of 2026. A majority of Fed policymakers expect to see three rate cuts in the remainder of FY24, but for there to be fewer additional cuts through FY25 and FY26. The Fed’s Chairman, Jerome Powell, said that “we continue to make good progress in bringing inflation down”, but that “we’ve had two months of kind of bumpy inflation… and the question is, are there more bumps? We can’t know that, that’s why we are approaching this question carefully.”
MB bottom-line: US markets reacted positively to the guidance that the Fed still (at this point) intends to cut US rates by 75 basis points this year. It’s assumed that the cut will be distributed across three separate cuts of 25 basis points each, so both equity and bond markets reacted to that news with bullish vigor. With the US economy doing so well (the Fed just increased its projections for US economic performance), the Fed is probably going to be quite conservative in its approach to this first cut. It’s not forced to cut yet; so while the US job market and economy remain hot, we should expect the Fed to remain cool on this eventual pivot. On the domestic front, the BSP just guided that it expects to see higher PH inflation in March (around 4%), with average FY24 inflation coming in at around 3.6%. The BSP’s Monetary Board will meet to discuss rates on April 4.
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