Authorized and Regulated Entities: SARACEN MARKETS (PTY) LTD

Fed Signals Only One Rate Cut for 2024 as Core CPI Hits Three-Year Low

1 month ago

The Federal Reserve has scaled back its rate cut projections for this year, indicating just one quarter-point reduction, down from three projected in March. The core consumer price index fell to its lowest level in over three years, suggesting clear signs of data softening. Despite this, markets continue to anticipate that the Fed will cut rates sooner rather than later. The market is skeptical of the Fed’s cautious stance, viewing it as a reaction to an earlier dovish pivot that proved premature. Fed Chair Jerome Powell noted that the latest CPI figures have bolstered their confidence in the inflation trajectory but not sufficiently to justify immediate rate cuts.

In the commodities market, oil edged lower after a three-day advance as investors assessed an unexpected increase in US crude stockpiles alongside the Fed’s higher-for-longer rate outlook. Gold also declined amidst these developments.

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