The Federal Open Market Committee convened this week, and as anticipated, no changes were made to the interest rate, leaving the upper limit for federal funds at 5.5%. Furthermore, they emphasized that a recession in the United States is becoming less likely, and they anticipate a gradual decline in interest rates over the next few years.
What took many by surprise, however, was the significant shift in the authorities' economic outlook, as revealed in the Summary of Economic Projections. This document highlighted that twelve respondents recommended an additional rate hike before the year's end, while only seven members believed that rates had already risen sufficiently. It's worth noting that back in June, authorities had forecasted a 100 basis point rate cut for the following year, but by September, that figure had been scaled down to just 50 basis points, with another 50 basis point cut projected for 2024.
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