As expected the FOMC yesterday saw interest rates maintained at 5.25% - 5.50%. In addition, the vote to maintain interest rates clearly shows the two main factors that drive the decision of Fed members, namely stability and high demand for Treasury Securities and also a significant strengthening of the economy based on the release of American GDP data for the third quarter (GDP of Quarter 3) of the year this.
Even so, FOMC members have unanimously seen the inflation rate in the country increasing based on the annual "core PCE inflation" data summary that has been released recently. "Core PCE Inflation" is an indicator or reference tool used by the Fed in interpreting inflation levels against "CPI" inflation data. In connection with that, the Fed has opened up the possibility that there will be an increase in interest rates in the future as stated in yesterday's FOMC meeting "Determining the extent of additional policy firming that may be appropriate". This statement that has been issued is the same statement during the last "three" FOMC meetings where the Fed was seen to maintain the existing interest rate. Yesterday's Fed statement showed that the FOMC is now in "hold" mode, with a hawkish tone and the chance of a future interest rate hike is seen as potentially high. The market is now looking for "opportunities" or signs of support for yesterday's Fed decision which is now seen to be focused on the release of US jobs data tomorrow and CPI consumer inflation data next week.
US Interest Rate Outlook
No indication has been given in the Fed's statement yesterday, about lowering interest rates. We expect that interest rates in America will not be lowered until the second quarter (Q2) of 2024. The job market in America is currently seen to be strong and able to push the Fed's decision to keep the existing interest rates on hold for a longer period.
