The Fed's May FOMC interest rate meeting
2023-04-27
Summary:
The FOMC will likely deliver its third consecutive quarter of a percentage point rate increase and continue to allow assets to roll off of its nearly $8.6 trillion balance sheet in its year-long campaign to get inflation under control without sending the U.S. economy into a recession.
The Fed's May FOMC interest rate meeting
2023.5.4(Thursday)02:00
Previous (March): 4.75-5.00% Forecast: 5.00-5.25%
What to watch for：
Does the Fed pause its rate hikes?
Is the Fed prioritizing inflation or financial stability?
How does the Fed interpret SVB failure?
The FOMC will likely deliver its third consecutive quarter of a percentage point rate increase and continue to allow assets to roll off of its nearly $8.6 trillion balance sheet in its year-long campaign to get inflation under control without sending the U.S. economy into a recession. The Fed has raised rates nine times since March 2022.
A rate hike in May could be the end of the Fed’s current cycle of interest rate increases, according to CME Group. In March, the Fed updated its long-term U.S. economic projections to reflect a potentially slowing economy. FOMC economists now expect the core PCE index to rise 3.6% in 2023 but only 2.6% in 2024 as inflation subsides.
The FOMC released its March meeting minutes on April with some subtle changes to its language. In the release, the Fed acknowledged inflation remains “much too high” but removed its calls for “ongoing increases” to interest rates and instead said “some additional policy firming may be appropriate.”
Changes in non-farm payrolls
U.S. employers boosted hiring in April while raising wages for workers, pointing to sustained labor market strength. NFP are expected to rise by 190,000 in May, a cooling of the surprise gain of 253,000 jobs created in April.
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