Markets widely expect US Fed to hold rates steady

Fed Chair Powell is expected to affirm the central bank’s make-no-moves stance after cutting rates at three previous meetings

Markets widely expect US Fed to hold rates steady
This week’s meeting is shaping up as a comparatively uneventful end to a year that has been “far from dull,” as Powell dryly observed in a speech last month

Markets widely expect the central bank to hold interest rates steady when their two-day meeting concludes Wednesday after cutting rates over three consecutive times this year. 

A CNBC survey released Tuesday said it expects Federal Reserve policymakers will go into hibernation for as long as six months, keeping rates unchanged until at least the summer. 

The Fed cut interest rates by a quarter-percentage point at its past three meetings, most recently in late October to a range of between 1.5% and 1.75%. 

READ: Federal Reserve cuts interest rates by another quarter point

This week’s meeting is shaping up as a comparatively uneventful end to a year that has been “far from dull,” as Fed Chairman Jerome Powell dryly observed in a speech last month.

The Fed releases its latest policy statement at 2 pm Eastern time. Powell will deliver a statement and take questions from reporters at 2:30 pm.

Investors will still be watching Powell’s press conference for commentary on economic growth, and any fallouts from the US-China trade war. It is an open question whether any official will project cuts in 2020. Recent statements from most officials suggest a large majority will be comfortable projecting no changes in the coming year.

“Friday’s blowout jobs report makes it less likely the central bank will move to cut interest rates as the Fed’s dual mandate when assessing monetary policy is maximizing employment and stabilizing prices,” said CNBC.

Money Markets

According to analysts, Powell could provide an update on steps officials have taken to address potential plumbing hiccups in funding markets, particularly with year-end regulatory considerations adding to recent strains in short-term money markets.

“Fed officials are boosting their balance sheet by purchasing Treasury bills to avoid a rerun of market strains that surfaced in September, and they are ramping up overnight and short-term secured lending in markets for repurchase agreements, or repo, to address the year-end strains,” reported The Wall Street Journal.

Powell could face questions over whether these operations will be adequate.

Contact Uttara Choudhury at [email protected]

Follow her on Twitter: @UttaraProactive 

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events


The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...



iCoreConnect cloud-based software is a real game changer in healthcare

iCoreConnect (OTCQB: ICCT) President and CEO Robert McDermott joined Steve Darling from Proactive to discuss the company that provides HIPAA-compliant software for the medical and dental industries. McDermott discusses a few of their services, their recent revenue growth and why listing on...

15 hours, 48 minutes ago

2 min read