Bank of Canada Interest Rate Announcement

The Federal Reserve is the central bank of the United States, and is generally considered to be the most powerful central bank in the world. Often referred to as the Fed, it was founded to direct monetary policy and manage the financial system. A seven-member board governs the Fed, and there are 12 Federal Reserve Banks in regions throughout the U.S. He is also a staff writer at Benzinga, where he has reported on breaking financial market news and analyst commentary related to popular stocks since 2014.

Bill Adams, chief economist for Comerica Bank, says one additional interest rate hike in 2023 isn’t off the table just yet. Fortunately for the FOMC, the labor market, the U.S. consumer and the S&P 500 have remained resilient throughout the current tightening cycle. George Ball, chairman of Sanders Morris Harris, says investors should not expect any talk of interest rate cuts.

Staff economic projections

The Federal Reserve Act of 1913 gave the Federal Reserve responsibility for setting monetary policy. Meanwhile, the U.S. labor market has remained tight, making the FOMC’s fight against inflation more difficult. The Labor Department reported the U.S. economy added 209,000 jobs in June, while the rate of increase of U.S. wages held steady around 4.6% year-over-year. The unemployment rate fell slightly to 3.6% in June, remaining very close to 50-year lows. The FOMC conducts open market operations to guide monetary policy, and increase or reduce the money supply in the U.S. economy.

• Investors and workers, shoppers and savers all pay more attention to the FOMC’s decisions and the wording of its announcements at the end of each meeting.
• The FOMC holds eight regularly scheduled meetings during the year and other meetings as needed.
• Powell’s commentary on the near-term monetary policy outlook will likely be somewhat vague to leave the FOMC’s options open, and he may repeat the Fed’s recent mantra that all policy decisions are data-dependent.
• He is also a staff writer at Benzinga, where he has reported on breaking financial market news and analyst commentary related to popular stocks since 2014.
• The FOMC has been raising interest rates in an attempt to bring inflation down to its 2% long-term target.
• Is that if another 2023 interest rate hike is coming, it will very likely occur be November.

However, the upcoming meeting should offer clues on a potential interest rate increase at the Fed’s subsequent November decision. Interest rate futures give a slim chance of a September interest rate hike, and the Fed typically doesn’t like to surprise markets. As a result, the fed funds rate controls the availability of money to invest in houses, businesses, and ultimately in your salary and investment returns.

The S&P 500 – Not That Cheap Anymore

In June, Fed officials projected a median fed funds rate of 5.6% in 2023 and indicated the FOMC will not pivot from rate hikes to rate cuts until 2024. Most importantly, there’s the labor market, which remains stronger than the Fed would probably like. On the one https://investmentsanalysis.info/ hand, the August jobs report exceeded economists’ expectations. On the other hand, a third straight month of slower hiring, an uptick in the unemployment rate and moderating wage growth takes at least some pressure off the central bank in the shorter term.

The symposium has been held at the Jackson Lake Lodge in Jackson Hole, Wyoming, since 1982. Outsourced Chief Investment Officer service to institutional investors. He has previously served as Chief Investment Officer at Moola and FutureAdvisor, both are consumer investment startups that were subsequently acquired by S&P 500 firms. He has published two books and is a CFA Charterholder and educated at Oxford and Northwestern.

Speakers discuss academic papers and give speeches related to the designated theme for each year’s event. The Kansas City Fed’s Economic Research staff and the Kansas City Fed President come up with the event’s topic and create the agenda for the conference. The Federal Reserve Bank of Kansas City has hosted this annual economic policy symposium since 1978.

What happens in the meeting?

Outside of the annual economic symposium, the Jackson Hole area is known for its skiing, rafting, fishing, ranches and fine dining. There is nothing inherently important about the Jackson Lake Lodge in Grand Teton National Park, but the site was reportedly first chosen in 1982 to ensure Fed Chair Paul Volcker would attend the conference. Volcker was an avid fly fisherman, and the Jackson Hole area is known for its trout streams.

While I remain bullish in the intermediate and long term, the market may still grind through this consolidation and pullback phase in the coming weeks. Moreover, we may retest the previous low of about 4,350 SPX and move lower into the 4,300-4,200 (8-10%) correction range in a worse-case scenario. The fundamental factors surrounding the market appear solid, but we’re seeing more indications of a significant slowdown beneath the surface as we advance. Last week – We witnessed positive earnings announcements from several significant companies, including PDD (PDD), Salesforce (CRM), Broadcom (AVGO), and others.

The minutes from the Fed’s July meeting also broadly supported this view. However, since then economic data has suggested softening inflation and some signs of slowing jobs growth. However, inflationary pressures have been declining steadily over the past few months. The consumer price index (CPI) dropped to 3.2% in July 2023 from a 9.1% peak in June 2022 after the Fed embarked on a belligerent campaign to bring down prices, imposing 11 rate increases since March 2022. Key inflation drivers, such as the red-hot labor market, have also been cooling down recently. Traders across the globe pay attention to the decision as an indicator of global economic trends, and an insight into how other central banks around the world might adjust their inflation policy.

View Calendar by Month

Provided these catalysts and other developing elements, increased caution is warranted as we enter the Fall months. My correction bottom is the 4,150-4,350 level, and my year-end target range remains at the 4,800-5,000 point in the SPX. Some legislators, particularly on the Democratic side, have suggested the Fed raise its 2% inflation target, a move that would give it more policy flexibility and might deter further rate hikes. Gross domestic product has increased steadily since the rate hikes began, and the third quarter of 2023 is tracking at a 5.9% growth pace, according to the Atlanta Fed.

Traders anticipating higher interest rates could increase their exposure in banks and financial stocks, and lower exposure in high dividend-paying sectors such as utilities or bonds. The Committee adjusts interest rates by setting a target for the fed funds rate. This is the rate Fintech stocks that banks charge each other for overnight loans known as fed funds. Banks use the fed funds loans to make sure they have enough to meet the Fed’s reserve requirement. Banks must keep this reserve each night at their local Federal Reserve bank or in cash in their vaults.

Well-Known Stocks Under $10 That Wall Street Loves…

While the SPX dipped to about 20 P/E, it’s bounced back to around 25 now, illustrating that the general market is not that cheap anymore. It may be considered relatively expensive in a relatively high-interest rate environment. In that case, the SPX’s P/E may contract to about the zone again, implying a downside of around 10-20% is still plausible for the S&P 500 and other major averages. Therefore, a logical question appears – Is the correction over, or will the market go for another dip?

In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics, demographics, real estate, cost of living indexes and more. A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. As a senior writer at AOL’s DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.

What Is the Jackson Hole Economic Symposium?

Of course, an interest rate hike at the December meeting is possible. Is that if another 2023 interest rate hike is coming, it will very likely occur be November. The Federal Reserve is expected to hold interest rates steady at its next interest rate announcement at 2pm ET on September 20.