FOX Business host Larry Kudlow spoke on the Democracy 2024 Committee about the Federal Reserve's failures in the economy, especially for middle-income workers.
of federal reserve system On Thursday, it is expected to announce its next policy direction on interest rates, following the election and a flood of economic data.
Federal Open Market Committee (FOMC) policymakers are expected to announce a 25 basis point rate cut, lowering the benchmark federal funds rate to a range of 4.5% to 4.75% from its previous range of 4.75% to 5%. There is.
The expected rate cut comes after inflation soared to a 40-year high following pandemic-related supply chain disruptions and an influx of federal spending for relief. This follows a 50 basis point rate cut, the first rate cut in four years. Measures and other initiatives.
Jerome Powell Fed Chairman He will hold a press conference after the Fed's announcement and will take questions about the central bank's plans to cut or suspend interest rates at a future meeting.
The Fed's preferred inflation measure showed that price increases continued to slow in September.
Federal Reserve Chairman Jerome Powell and the FOMC are expected to announce a 25 basis point (bp) rate cut on Thursday. (Seth Herald/Bloomberg via Getty Images/Getty Images)
The Fed's policy meeting comes as inflation continues to show signs of slowing, although prices remain high. The announcement also comes after weaker-than-expected employment data raised concerns about the health of the labor market.
The Department of Commerce released data last week showing that: The Fed's preferred inflation gauge The personal consumption expenditure (PCE) index rose 2.1% year-on-year in September. The rate fell slightly from August's 2.3% as the pace of price increases continued to slow. The US Federal Reserve is keeping an eye on the PCE headline numbers as it aims to bring inflation back to its 2% target. Core PCE, which excludes volatile food and energy prices and is considered a better indicator of inflation, rose 2.7%, little changed from the previous month.
Ministry of Labor job report The U.S. economy added just 12,000 jobs in October, far less than the 113,000 job growth expected by economists at LSEG. This was the lowest monthly payrolls increase since December 2020, but a strike by Boeing's 33,000 unionized machinists and economic disruption from Hurricanes Helen and Milton contributed to job growth. This was due to the fact that it was lower than expected.
US economy adds 12,000 jobs in October, far less than economists expected
The market expects a 25 basis point rate cut on Thursday. President-elect Trump's victory As for Vice President Harris, there have been some changes ahead of Fed meetings in the coming months.
The probability that the Fed will cut rates another 25 basis points in December, to a range of 4.25% to 4.5%, fell slightly to 67.2% from 77.3% on Wednesday. after electionMeanwhile, the probability that the Fed will keep interest rates unchanged rose from 22% to 31.2%, according to CME FedWatch.
El-Erian: Interest rates and inflation are moving in the right direction, but falling prices are 'not going to happen'
Chairman Powell could provide insight into the Fed's thinking on interest rates in the coming months. (Photographer: Ting Sheng/Bloomberg via Getty Images/Getty Images)
“The most important takeaways from the December FOMC will be the upcoming two CPI and one jobs reports,” Michael Feroli, JPMorgan's chief U.S. economist, said in an analyst note. “Depending on the outcome of the election, the probability of a rate cut could decrease slightly as the rise in risk assets could be a factor in the discussion.”
“Since December, the Fed has eased on a quarterly basis, with the next easing expected in March and continuing until the funds rate reaches 3.5%,” Feroli wrote.
Uncertainty surrounding the Fed's 2025 rate cut plans is reflected in CME FedWatch's odds for its January meeting. Markets believe there is a 53% chance that interest rates will fall between 4.25% and 4.5%, which would mean a 25 basis point cut following a similar rate cut this month. This is up from the 47% chance on Election Day.
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After the election, the probability that rates would be cut more aggressively in the 4% to 4.25% range in January fell from 41% to 26.9%, but the probability that the Fed would keep rates between 4.5% and 4.75% was 10.6%. It rose from 19.2% to 19.2%. After the election.
Fed plans next meeting policy meeting The December meeting is scheduled for December 17-18, and the January meeting is scheduled for January 28-29.
