Fed Preview: July 2023

After increasing the rates to a 23-year high of 5.25%–5.50% in July 2023, we expect the Fed to hold rates at the same level for the 8th consecutive meet...

author: Ahura Chalaki

published:Jul 31, 2024 13:44

Reading Time:

2 minutes

category:fundamental

After increasing the rates to a 23-year high of 5.25%–5.50% in July 2023, we expect the Fed to hold rates at the same level for the 8th consecutive meeting in the July 2024 policy meeting. However, the Committee will likely signal that rate cuts are coming as early as the next meeting in September.

According to FedWatch tools, there is almost a 90% chance of a 25 bps rate cut and a 10% chance of a 50 bps rate cut. Market reactions and changes in these probabilities will clarify the market's next direction.

The Federal Reserve seeks to create maximum employment and keep prices stable. While we can confirm the material improvement in inflation in recent months, we have also seen relative weaknesses in the labor market, with the unemployment rate increasing to 4.1%. To better understand the US economy, let's review some of the most important data we have so far.