As expected, the federal funds rate remained unchanged. This month, we were introduced to a new “dot plot”. The projection suggests that rates will drop by 0.75 percent this year, which corresponds to three decreases of 25 basis points each. As indicated by Powell, the US economy remains relatively strong despite high interest rates; the “soft landing” scenario seems to be materializing.
Market expectations regarding the number and timing of interest rate cuts this year have been gradually shifting. They are currently in line with the new projection. We believe that the interest rate will not be cut at the next meeting in May. Decisions are now heavily dependent on incoming macroeconomic data.
Bartosz Wałecki, Analyst Michael / Ström Brokerage House.
