{"id":4167,"date":"2023-11-02T09:07:20","date_gmt":"2023-11-02T09:07:20","guid":{"rendered":"https:\/\/hcfx.sofyma.com\/?p=4167"},"modified":"2023-11-02T09:16:27","modified_gmt":"2023-11-02T09:16:27","slug":"federal-reserve-hold-rates","status":"publish","type":"post","link":"https:\/\/hamiltoncourtfx.com\/es\/federal-reserve-hold-rates\/","title":{"rendered":"Federal Reserve Hold Rates"},"content":{"rendered":"
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Yesterday, the Federal Reserve met market expectations in maintaining their benchmark policy target rate of 5.25-5.5% – its highest level in 22 years. This marked the second consecutive hold as policy makers considered how the full effect of the Central Bank\u2019s monetary tightening is yet to be fully felt given time lags.<\/p>\n

During Powell\u2019s press conference half an hour after the rate decision however, he maintained that the Federal Reserve are \u201ccommitted to achieving a stance of monetary policy that is sufficiently restrictive to bring down inflation to 2% over time and we\u2019re not confident yet that we have achieved such a stance.\u201d Sticking on the hawkish side, Powell further contended that \u201cthe committee is not thinking about rate cuts right now at all\u201d. This comes against a market expectation which suggests that the Fed may cut rates twice next year, though this has been downwardly revised from a prior expectation of four rate cuts over 2024. This is indicative of<\/p>\n <\/div>\n

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the view that monetary conditions will be \u2018higher-for-longer\u2019 as growth and the labour market remains better than expected but inflation remains above target.<\/p>\n

Nevertheless, given how the previous Federal Reserve\u2019s dot plot indicated that the majority of FOMC members saw another 25bps hike this year, Powell suggested that the reliability of such forecasts erodes over time. For many, this indicates that the Fed\u2019s appetite for another hike appears to have diminished in the last six weeks, though the Fed have reiterated that their future policy decisions will remain data dependent.<\/p>\n

This comes as year-on-year inflation remains above the Fed\u2019s 2% target rate, coming in at 3.7% for September. This comes as growth rose to 4.9% on a quarter-on-quarter basis for Q3 which represented the strongest level of growth since Q4 2021.<\/p>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n\n

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All Eyes on Threadneedle Street<\/h2>\n <\/div>\n
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At 1300 today, markets will turn their attention to Threadneedle Street, where the Monetary Policy Committee are expected to hold the Bank of England\u2019s benchmark policy rate at 5.25%. This would mark the second hold following fourteen consecutive rate hikes seen since the Bank of England stated their tightening cycle in Q4 2021.<\/p>\n

During the last MPC meeting, five members voted in favour of maintaining the benchmark policy rate against four who voted to raise rates 25bps. Since then, on 18\u00a0October, data from the ONS indicated that headline inflation remained unchanged from last month\u2019s print, coming in at 6.7%. This surpassed expectations of 6.5% as fuel prices and the cost of hotel stays rose, offsetting the slowdown in food and drink prices and served as further indication that the Bank of England continue to face headwinds as they try to get inflation back down to their 2% target.<\/p>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n\n

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AI Summit<\/h2>\n <\/div>\n
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Rishi Sunak\u2019s AI summit moves into day two today, but the big headline from day one wasn\u2019t from the summit itself, rather from what US Vice President Kamala Harris had to say from the US Embassy in London, prior to the conference starting. Ms Harris, apparently not one to arrive at a party empty handed, came with an executive order from the President which has set a broad range of requirements upon AI developers, including:\u00a0 companies are required to share safety test results with the government, protecting consumer privacy by creating guidelines that agencies can use to assess privacy techniques that companies use within AI. Stopping algorithms discriminating and creating best practices and appropriate roles for AI within the justice, healthcare and education sectors.\u00a0 The message from MS Harris was also a bit of a swipe on Rishi\u2019s conference, which is focussed around thinking around the unrealised threats of AI, whereas the VP has said \u201clet us be clear, there are additional threats that are also causing harm, and which to many people also feel existential\u201d. So not the best start for the PM, who wants the UK to be a clear leader in AI, but is now immediately behind the US on legislation around the technology, thanks to the stroke of a pen from Joe Biden! Politico has more, click here to read.<\/a><\/span><\/p>\n <\/div>\n <\/div>\n <\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"

Expectations met by the Federal Reserve, rate release on Threadneedle Street, and Rishi Sunak’s AI summit.<\/p>","protected":false},"author":15,"featured_media":1415,"comment_status":"open","ping_status":"open","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"rp-language":[16],"class_list":["post-4167","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-morning-updates","rp-language-en_gb"],"_links":{"self":[{"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/posts\/4167","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/comments?post=4167"}],"version-history":[{"count":20,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/posts\/4167\/revisions"}],"predecessor-version":[{"id":4187,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/posts\/4167\/revisions\/4187"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/media\/1415"}],"wp:attachment":[{"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/media?parent=4167"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/categories?post=4167"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/tags?post=4167"},{"taxonomy":"rp-language","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/rp-language?post=4167"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}