The first meeting of the Federal Open Market Committee (FOMC) will be held on January 31 – February 1, 2023. The Fed will announce its decision to raise interest rates on February 1 at 2:00 PM ET. Investors, traders, economists, and analysts follow the announcement of a Fed rate hike attentively on a global scale. The size of the rate increase and the remarks made by Fed Chairman Powell at the conference that follows the event are both of interest to stock market players.
The US Federal Reserve is anticipated to raise interest rates by a quarter percentage point and scale back the extent of the hike for a second consecutive meeting. The US Fed previously eased up from four successive 75 basis point rate hikes to a 50 basis point increase in December. “There is some belief among investors that the Fed won’t cut rates until a sustained decline in inflation toward its 2 percent target is established. While contradictory to the Fed’s projections, this would mean we wouldn’t see rate cuts until the end of Q4 2023 or early Q1 2024. Although the job market has remained strong, I wouldn’t be surprised if we enter a recession in 2023. In the event that this happens, it’s unlikely the Fed will bail out the economy as it’d be viewed as counter to cooling inflation,” says Kavan Choksi, a successful investor, business management, and wealth consultant at KC Consulting.
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Interest rates increased by 425 basis points in 2022, and at least another 50 basis points hike is projected for 2023. Therefore, by year’s end, the terminal rate may be around 5% levels. According to US CPI statistics issued in January, annual inflation decreased to 6.5% in December from 7.1% in November. The Fed is anticipated to maintain rates until inflation is under control and falls within the target range of 2%. Markets, therefore, anticipate a 25 basis point rate increase on February 1 to bring rates down to a range of 4.5 to 4.75%.
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The news of the Fed’s rate hike is closely followed by investors, traders, economists, and analysts all across the world. The size of the rate increase and the remarks made by Fed Chairman Powell at the conference that follows the event are both topics of interest to stock market participants.
The FOMC meets eight times year, in addition to any additional meetings that may be required. The minutes of regularly scheduled meetings are made available to the public three weeks after the day the policy decision was taken.