Norada Real Estate Investments

  • Home
  • Markets
  • Properties
  • Notes
  • Membership
  • Podcast
  • Learn
  • About
  • Contact

When is the Next Fed Interest Rate Decision 2023?

October 14, 2023 by Marco Santarelli

When is the Next Fed Interest Rate Decision

When is the Next Fed Interest Rate Decision

The Federal Reserve's interest rate policy has been a topic of much debate and speculation in recent months, with many people asking, “When is the Next Fed Interest Rate Decision.”

With the US economy showing signs of strength, inflation rising, and concerns about the stability of the banking sector, the Fed's decision regarding the next rate hike will have a significant impact on the economy.

What Date is the Next Fed Interest Rate Decision?

The Federal Reserve (Fed) is the central bank of the United States and it sets the short-term interest rates that affect the economy and financial markets. The Fed meets eight times a year to review economic data and make decisions on monetary policy. The next Fed meeting on interest rates 2023 will be on November 1, 2023.

The next Fed meeting will be important because it determines the level of the federal funds rate, which is the interest rate that banks charge each other for overnight loans. The federal funds rate influences other interest rates, such as mortgage rates, credit card rates, and savings rates. The Fed also uses other tools, such as quantitative easing and forward guidance, to affect the money supply and market expectations.

Next Fed Rate Hike: Fed Meetings Calendar 2023 (Source FOMC)

The Federal Reserve has released its 2023 meeting calendar, which includes eight scheduled meetings. These meetings are crucial as they set monetary policies that impact the entire economy. The first meeting of the year took place on January 31 and February 1.

Meetings have already been held in March, May, June, July, and September. The next Fed meeting on interest rate decisions is scheduled for November 1, 2023. During these meetings, the Federal Open Market Committee (FOMC) will discuss various factors affecting the economy, including inflation, employment rates, and GDP growth, to make informed decisions about the direction of interest rates.

Meeting Dates Interest Rate Hikes
January 31 to February 1 +25 basis points
March 21 to 22 +25 basis points
May 2 to 3 +25 basis points
June 13 to 14 No Hike
July 25 to 26 +25 basis points
September 19 to 20 No Hike
October 31 to November 1 –
December 12 to 13 –

What Are the Expectations for the Next Fed Meeting?

The expectations for the next Fed meeting are mixed, as the Fed faces a challenging economic environment. On one hand, the economy has been growing at a solid pace, with low unemployment and strong consumer spending.

On the other hand, inflation has been rising above the Fed's target of 2%, driven by higher energy costs, supply chain disruptions, and labor shortages.

The Fed has been gradually raising interest rates since December 2022, when it lifted the federal funds rate from near zero to a range of 4% to 5%. The Fed has indicated that it will continue to raise rates until it reaches a neutral level that neither stimulates nor restrains economic growth.

However, some analysts and investors think that the Fed may pause or even reverse its rate hikes if inflation proves to be transitory or if the economy shows signs of slowing down.

The Fed's own projections, released after its September meeting, show that most policymakers expect one more rate hike in 2023, followed by two more in 2024.

However, these projections are not a commitment and they may change depending on the incoming data. The Fed also publishes a summary of its economic forecasts and a dot plot that shows the individual rate expectations of each policymaker.

How Will the Next Fed Meeting Affect the Markets?

The next Fed meeting will affect the markets depending on how it aligns with or deviates from market expectations. If the Fed raises rates as expected, or signals that it will continue to do so in the future, it may boost the value of the US dollar and put downward pressure on bond prices and stock prices. If the Fed holds rates steady or signals that it will pause or cut rates in the future, it may weaken the value of the US dollar and lift bond prices and stock prices.

The markets will also pay attention to the tone and language of the Fed's statement and press conference, as well as any changes in its economic projections and dot plot. Any hints of hawkishness or dovishness from the Fed may cause market volatility and affect investor sentiment.

Before the next Fed meeting, you should review your financial goals and risk tolerance and make sure that your portfolio is well-diversified and aligned with your objectives.

You should also monitor the economic data and market movements leading up to the meeting and be prepared for any potential surprises or shocks from the Fed. You should avoid making any rash decisions based on emotions or short-term fluctuations and stick to your long-term plan.

What Will be the Impact of Next Fed Rate Hike in November 2023?

The Fed has hiked rates 11 times so far, bringing the target range to 5.25%-5.50%. The Fed's rate hikes are intended to prevent the economy from overheating and inflation from rising too high, as well as to normalize monetary policy after a long period of stimulus.

However, the Fed's rate hikes also have significant impacts on various sectors of the economy, such as consumers, businesses, financial markets, and the global economy. Here are some of the potential effects of the next Fed rate hike, which could happen as soon as November 2023, according to some analysts and market expectations.

Consumers

A higher federal funds rate means that banks will charge higher interest rates on loans and credit cards, making borrowing more expensive for consumers. This could reduce consumer spending, which is a major driver of economic growth.

On the other hand, a higher federal funds rate also means that banks will pay higher interest rates on deposits and savings accounts, making saving more attractive for consumers. This could increase consumer confidence and wealth, as well as encourage more saving for retirement and other goals.

Businesses

A higher federal funds rate means that businesses will face higher borrowing costs, which could reduce their profitability and investment. This could slow down business expansion, hiring, and innovation, as well as increase default risk for highly leveraged firms.

On the other hand, a higher federal funds rate also means that businesses will benefit from a stronger economy and lower inflation, which could boost their revenues and earnings. Moreover, a higher federal funds rate could signal that the Fed is confident about the economic outlook, which could improve business sentiment and expectations.

Financial Markets

A higher federal funds rate means that bond prices will fall and bond yields will rise, as investors demand higher returns to lend money. This could reduce the demand for bonds and increase the demand for stocks, as well as increase market volatility and uncertainty.

On the other hand, a higher federal funds rate also means that the Fed is tightening monetary policy to prevent inflation from getting out of control, which could support the value of the dollar and reduce inflation expectations.

Furthermore, a higher federal funds rate could reflect that the Fed is following a predictable and transparent policy path, which could enhance market confidence and stability.

Global Economy

A higher federal funds rate means that the U.S. dollar will appreciate against other currencies, as investors seek higher returns in dollar-denominated assets. This could make U.S. exports more expensive and less competitive in foreign markets, reducing U.S. trade and current account balances.

On the other hand, a higher federal funds rate also means that the U.S. economy is growing strongly and leading the global recovery, which could boost global demand and growth.

Additionally, a higher federal funds rate could help ease global financial imbalances and risks by encouraging capital flows to emerging markets and reducing excessive liquidity in developed markets.


Sources:

  • https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm

Filed Under: Economy, Financing Tagged With: Fed Rate Hike, Next Fed Rate Hike

Fed Chair Powell Expects More Interest Rate Hikes in 2023

June 22, 2023 by Marco Santarelli

Fed Chair Powell Expects More Interest Rate Hikes

Federal Reserve Chairman Jerome Powell recently reiterated that the fight against inflation is far from over and that more interest rate increases are likely in the near future. Speaking before the House Financial Services Committee, Powell indicated that the decision to hold off on rate hikes during the recent Federal Open Market Committee (FOMC) meeting was just a temporary pause and not a signal that the Fed is done raising rates.

Fed Chair Powell Expects More Interest Rate Hikes

Despite some moderation, inflation remains a concern, with pressures still running high. The Fed's focus on core inflation highlights the persistent upward pressure on prices. Powell's remarks underscored the importance of a gradual and cautious approach to policy adjustments, given the progress made and the need for a balanced economic landscape.

Inflation Concerns Persist

Powell acknowledged that while inflation has moderated somewhat since last year, it remains well above the Federal Reserve's target of 2%. He emphasized that inflation pressures continue to run high, and there is a long way to go before inflation can be brought down to the desired level. Despite recent cooling, inflationary pressures persist, and the central bank is committed to taking further action to address the issue.

Anticipated Rate Hikes

Following the recent FOMC meeting, officials signaled that they foresee an increase in interest rates totaling 0.5 percentage points by the end of 2023. This projection implies two additional rate hikes, assuming quarter-point increments. The current benchmark borrowing rate set by the Fed is in the range of 5% to 5.25%. Powell's remarks align with the consensus view among FOMC participants that further rate increases will be necessary in the coming months.

Assessing Core Inflation

When evaluating inflation, the Fed focuses on core inflation, which excludes food and energy prices. According to the central bank's preferred measure of personal consumption expenditures prices, core inflation was at a rate of 4.7% year-over-year through April. The core consumer price index for May stood at 5.3%. These figures demonstrate that core inflation remains elevated, emphasizing the need for continued vigilance and monetary policy adjustments.

Lagging Effects of Monetary Policy

Monetary policy measures, including rate hikes and the reduction of bond holdings on the Fed's balance sheet, often have delayed effects on the economy. As a result, the decision to abstain from raising rates during the most recent meeting was influenced by the need to observe the impact of previous tightening measures. Powell highlighted that the economy continues to feel the effects of monetary restraint, particularly in interest rate-sensitive sectors. The full consequences of this policy tightening will take time to materialize, especially with regard to inflation.

Adjusting Policy Pace

Powell acknowledged that the Fed has adjusted its approach to the policy after implementing aggressive rate hikes comparable to the early 1980s. Previously, the Fed had raised rates by 0.75 percentage points consecutively four times. However, Powell now believes that a more moderate pace is appropriate. He emphasized that given the progress made thus far, raising rates is still a viable option but should be done gradually and cautiously. The adjustment in policy pace reflects the evolving economic landscape and the need for a balanced approach.

Inflation Expectations and Economic Growth

Powell addressed the importance of well-anchored inflation expectations for predicting future price trends. He cited the University of Michigan consumer confidence survey, which showed a dip in inflation expectations for the next year to 3.3%, the lowest level since March 2021. While this indicates some positive developments, Powell cautioned that reducing inflation to the desired level would require slowing down economic growth below its trend rate. He also stressed that future rate decisions would be based on incoming data and evaluated on a meeting-by-meeting basis, rather than adhering to a predetermined course.

Regulatory Practices and Banking Turmoil

In his remarks, Powell briefly touched upon the banking turmoil experienced earlier in the year. He emphasized that the episode served as a reminder of the importance of appropriate supervisory and regulatory practices. The Fed is committed to ensuring the stability of the financial system and will continue to evaluate and adjust its regulatory framework as needed. Powell's acknowledgment of the banking turmoil highlights the Fed's dedication to maintaining a resilient financial sector and underscores the interconnectedness between monetary policy and financial stability.


Source:

  • https://www.cnbc.com/2023/06/21/powell-expects-more-fed-rate-hikes-ahead-as-inflation-fight-has-a-long-way-to-go.html

Filed Under: Economy, Financing, Mortgage, Trending News Tagged With: Fed Chair, Fed Rate, Fed Rate Hike, Federal Reserve, Interest Rate Hikes

Real Estate

  • Baltimore
  • Birmingham
  • Cape Coral
  • Charlotte
  • Chicago

Quick Links

  • Markets
  • Membership
  • Notes
  • Contact Us

Blog Posts

  • First-Time Home Buyer Government Programs: Guide for Buyers
    November 29, 2023Marco Santarelli
  • How Long Does It Take to Get a 700-800 Credit Score?
    November 29, 2023Marco Santarelli
  • Current Fed Interest Rates 2023
    November 29, 2023Marco Santarelli

Contact

Norada Real Estate Investments 30251 Golden Lantern, Suite E-261 Laguna Niguel, CA 92677

(949) 218-6668
(800) 611-3060
BBB
  • Terms of Use
  • |
  • Privacy Policy
  • |
  • Testimonials
  • |
  • Suggestions?
  • |
  • Home

Copyright 2018 Norada Real Estate Investments