![]() wages were up 5.2% from a year ago and 0.3% month over month in April. unemployment rate remained stable at 3.6%, while the labor participation rate ticked higher by 10 basis points to 62.3%. Labor Department reported the economy added 390,000 jobs in May, exceeding economist expectations of 325,000 jobs. economic downturn, and there are no signs an economic recession is imminent at this point. So far, the Federal Reserve has avoided a sharp U.S. In March, Fed economists forecasted that the Personal Consumption Expenditures ( PCE) price index would rise 4.3% in 2022 but only 2.7% in 2023 as inflation subsides. ![]() Investors will be watching closely for any potential changes to the Fed’s long-term inflation projections. In March, five out of 16 FOMC participants projected the federal funds target rate would exceed 3% in 2023. economic projections, including its “dot plot” outlook for interest rates. In addition, the June meeting will see a fresh update to the Fed’s long-term U.S. The central bank has said that monthly balance sheet reduction will ramp to $60 billion in Treasurys and $35 billion in MBS per month starting in September. The Fed is also expected to stick to its previously disclosed plan to allow up to $30 billion in Treasury securities and $17.5 billion in agency mortgage-backed securities (MBS) to mature and roll off its balance sheet per month starting in June. If the FOMC pulls the trigger on another 50 bps raise, its federal funds rate target rate will be between 1.25% and 1.50%. According to CME Group, markets are currently pricing in a 95% chance of another 50 bps rate hike this month.
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