Live updates on the Fed’s March rate decision | Top Vip News

Federal Reserve Chair Jerome Powell will continue to seek confirmation that inflation is approaching the central bank’s 2% target, even after a recent series of higher inflation readings.

“The other thing is, in the second half of the year, there were some pretty low readings, so it might be harder to move forward into that 12-month window,” Powell said.

“However, we are looking for data that confirms the low readings we had last year,” Powell continued. “And it will give us a greater degree of confidence that what we saw was indeed inflation moving sustainably up to 2%.”

– Sara Min

The main inflation data (the consumer price index and personal consumption expenditure) increased in both January and February. Federal Reserve Chairman Jerome Powell believes this data is further evidence of inflation’s non-linear downward trajectory.

“I think they haven’t really changed the overall story, which is inflation gradually coming down on a sometimes bumpy path toward 2%,” he said during a news conference Wednesday afternoon. “We’re not going to overreact to this two months of data, nor are we going to ignore it.”

—Lisa Kailai Han

Responding to the Fed’s decision to keep rates steady, Seema Shah, chief global strategist at Principal Asset Management, said: “Powell may have shown his cards: he needs a good reason not to cut rates, rather than a reason to cut rates. Maybe the markets.” “We couldn’t have asked for more from the Fed and stocks will celebrate.”

“The Fed really wants its soft landing to end. Stronger growth, lower unemployment, higher inflation… and yet there’s no change in the middle,” Shah continued. He emphasized that cutting rates before inflation approaches the Fed’s 2% target and while GDP growth is above trend is a “risky path.”

—Pía Singh

Federal Reserve Chair Jerome Powell and the central bank are not wavering as inflation proves sticky, said David Russell, global head of market strategy at investment platform TradeStation. And he said the continued expectation of three interest rate cuts this year is also promising.

“We’ve had some spikes in inflation this year, but Jerome Powell isn’t batting an eyelid,” Russell said. “Investors are relieved to see three cuts remain on the dot chart, supporting markets and risk appetite.”

“The Federal Reserve might wake up with a hangover, but the punch bowl isn’t going away just yet,” he said.

—Alex Harring

Federal Reserve Chair Jerome Powell said the central bank has not yet made a decision on how to change the pace of its balance sheet reduction, but noted that an adjustment is not far away.

“The committee’s general feeling is that it will be appropriate to slow the pace of the runoff fairly soon, consistent with the plans we have previously issued,” Powell said.

The shape of the balance sheet liquidation plan can affect supply in the bond market and is closely watched by fixed income traders.

—Jesse Libra

Federal Reserve Board Chairman Jerome Powell reiterated on Wednesday that authorities still intend to cut rates before the end of this year, assuming economic growth continues.

“We think our policy rate is probably at its peak for this type of cycle, and that if the economy broadly evolves as expected, it will probably be appropriate to begin tapering policy moderation at some point this year,” Powell said.

He also reiterated his confidence in the Federal Reserve’s target inflation rate of 2%.

—Pía Singh

That the Fed is maintaining its expectation of three interest rate cuts in 2024 can be seen as a positive sign, even as the central bank left levels unchanged at its March meeting, according to Sonu Varghese, global macro strategist at Carson Group.

“The details are quite muted, because they are leaving rate cuts on the table even as they project slightly higher inflation and more economic growth,” Varghese said.

—Alex Harring

The Federal Reserve’s statement for its March meeting is now available. Click here to see CNBC’s comparison of Wednesday’s statement with that of the most recent meeting in January.

—Alex Harring

The major averages rose Wednesday afternoon after the Federal Reserve released its policy decision and rate forecast.

The S&P 500 gained 0.3% and the Nasdaq Composite jumped 0.5%. The Dow Jones Industrial Average advanced more than 140 points, or nearly 0.4%.

–Darla Mercado

The three major averages held near the flat line as investors prepared for the Federal Reserve’s rate decision.

The S&P 500 was down 0.06%, while the Nasdaq Composite was down 0.08%, as of 1:36 p.m. ET. The Dow Jones Industrial Average fell about 6 points, or 0.02%.

Treasury yields were also stable in the run-up to the Federal Reserve’s announcement. The two-year Treasury rate fell less than 2 basis points to 4.675%. The 10-year yield also fell less than 2 points to 4.279%.

–Darla Mercado

The central bank’s stance on interest rates and how it will proceed is a priority for investors, but the Federal Reserve’s reduction of its balance sheet should not be forgotten.

The central bank has been depleting its $7.6 trillion in Treasuries, mortgage-backed securities and other assets, and could soon reduce its spending and ultimately end the shrinking of its balance sheet. Right now, the Federal Reserve is allowing up to $60 billion a month in Treasury bonds to leave its balance sheet without being reinvested, along with up to $35 billion in mortgage-backed securities.

Investors will be watching for details on how the Federal Reserve will proceed to reduce its balance sheet, an issue that Fed Chair Powell could address during his press conference.

Read more here from CNBC’s Jeff Cox on the Fed’s balance sheet.

–Darla Mercado, Jeff Cox

It’s been two years since the Federal Reserve raised interest rates for the first time this past cycle, and the move has had a significant impact on consumers’ wallets.

Since the Federal Reserve began raising rates in March 2022, borrowers have had to shell out more in interest expenses. During the week of March 11, 2022, a 30-year fixed mortgage had a rate of 4.29%, up from 7.09% on March 15, 2024, according to MND.

Carrying debt on a credit card balance has also become more expensive, with the annual percentage rate increasing from 16.34% to 20.75% since the Federal Reserve adopted its tighter stance about two years ago, according to Bankrate.

Even as times have gotten tougher for borrowers, savers and fixed income investors are reaping the benefits of higher rates.

For starters, the 2-year Treasury yield is now 4.67%, up from 1.75% in March 2022, according to Refinitiv. Parking cash in a certificate of deposit has also become more rewarding, with annual percentage returns on 6-month CDs rising from 0.22% to 3.298%, according to Lending Tree.

–Darla Mercado, Nick Wells

Central bank policymakers are widely expected to remain firm on interest rates at the conclusion of their March policy meeting, but the dot plot will be the main event for traders.

The policy-setting Federal Open Market Committee will release its dot plot, a breakdown of individual members’ expectations for future interest rates.

Investors entered 2024 with an optimistic outlook on interest rate cuts, anticipating the Federal Reserve would lower rates six or seven times in quarter-percentage point increments. But those expectations have become reality, as investors now anticipate rates will fall for the first time in June and forecast just three cuts.

The change in the Street’s forecast comes as economic data shows inflation is proving harder to quell than many expected.

Read more from CNBC’s Jeff Cox on what to expect from the Federal Reserve meeting.

–Darla Mercado