Hardly anyone would describe a meeting of the Federal Open Market Committee as a rager, but today's quarter-point rate hike was, even for the central bank, pretty boring.
"The statement is a yawner," commented Seema Shah, chief global strategist at Principal Asset Management. Wall Street appeared to agree, as stocks ended the day little changed (though, notably, the Dow eked out a small gain, notching its 13th consecutive win — the longest winning streak for the index since 1987.)
Sure, interest rates are now at their highest level in 22 years. And yes, they've reached that level super fast — in just 18 months, the Fed has raised rates 11 times, from near zero to a range between 5.25% and 5.5% in just 18 months. All of that was largely expected.
But there were some notable takeaways, as my colleague Elisabeth Buchwald writes.
1️⃣ The 'soft landing' is within reach
Fed chief Jay Powell still believes the Fed can get inflation down to 2% without cratering the economy — something that most observers would have called fantastical a year ago.
In other words: That 2023 recession you've been warned about ... it's far less likely now.
2️⃣ Looking for rate cuts? Keep looking.
Our boy Jay Money often gets asked about what Fed officials would need to see to do a 180 and start cutting interest rates. And true to form, Jay gave us a cryptic reply:
"We'd be comfortable cutting rates when we're comfortable cutting rates," he said at news conference today. JP, you sly silver fox.
3️⃣ We'll do it live!
The next few policy meetings will be "live," which is Fed-speak meaning we won't get any forward guidance on officials' policy decision.
That's a big change from the past year, when the Fed strategically avoided spooking investors by signaling its next move well in advance.
One thing we can expect: The Fed's likely got one more rate hike in its arsenal for the year, if the economy remains so robust that inflation begins to creep back up. As always, Jay and his gang of Fed officials will remain — buzzword warning — "data dependent."
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