Today the Federal Reserve’s anticipated meeting saw the central bank remain rocksteady 5.5% interest rates for the rest of the year. This was widely expected, so much so the Dow Jones Industrial Average hit an all-time new record in the markets today.
However, Fed Chair Jerome Powell indicated that rate cuts are coming in 2024, even though the Federal Reserve has yet to reach their 2% inflation target. These rate cuts for 2024 were more than expected, but is now a matter of how many and how soon.
As we look ahead to next year, I want to assure the American people that we’re fully committed to returning inflation to our 2% goal. We storing price stability is essential to achieve a sustained period of strong labor market conditions that benefit all.
Powell said during his speech
But, the reported rates of inflation by the government and the Federal Reserve are grossly different compared to third-party sources that are factoring in other datapoints, and the dollar’s purchasing power and parity. Truflation reports that real inflation is closer to 23%, versus the 3.1% the government says it is.
“While the weather is still cold outside, the Fed has suggested a potential thawing of frozen high interest rates over the next few months,” said Rick Rieder, chief investment officer of global fixed income at asset management giant BlackRock, in response to the Fed’s decision.
Again, during Powell’s speech, he made it clear that rate cuts will be coming…
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