Odds Now At 90% (VERY LIKELY) The U.S. Prime Rate Will Remain at 8.50% After The June 12, 2024 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 90% (very likely) the Federal Open Market Committee (FOMC) will vote to keep the benchmark target range for the fed funds rate at  5.25% - 5.50% at the June 12^TH, 2024 monetary policy meeting, with the United States Prime Rate (a.k.a Fed Prime Rate) holding at 8.50%.

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Jobs + Wages Weakening: Exactly What The Fed Wants
  

• 
  The number of jobless people per job opening crept up during March, 2024 (graphic.)  A lagging indicator, but nevertheless: further proof that the Fed's mission of killing jobs, and keeping short-term interest rates elevated, to tame inflation, is working.

• From the April Jobs Report: A rare negative month-on-month reading for Average Weekly Earnings (-0.09%.)

Stay tuned...

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The United States Prime Rate was raised to the current 8.50% on July 26, 2023.

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NB: U.S. Prime Rate = (The Fed Funds Target Rate + 3)

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Current Odds

• Current odds the U.S. Prime Rate will remain at 8.50% after the June 12^TH, 2024 FOMC monetary policy meeting: 90% (very likely.)
  

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Third FOMC Meeting of 2024 Adjourned: United States Prime Rate Continues at 8.50%

United States Prime Rate

The Federal Open Market Committee (FOMC) of the Federal Reserve System has just adjourned its third monetary policy meeting of 2024 and, in accordance with our latest forecast, has voted to keep the benchmark target range for the federal funds rate at 5.25% - 5.50%. Therefore, the United States Prime Rate (a.k.a the Fed Prime Rate) continues at 8.50%.

NB: U.S. Prime Rate = (The Fed Funds Target Rate + 3)

Here's a clip from today's FOMC press release (note text in bold):

"...Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have remained strong, and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated. In recent months, there has been a lack of further progress toward the Committee's 2% inflation objective.

The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run. The Committee judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year. The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks.

In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4% to 5-1/2%. In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.

In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. Beginning in June, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion. The Committee will maintain the monthly redemption cap on agency debt and agency mortgage‑backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities. The Committee is strongly committed to returning inflation to its 2% objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions,  inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Michael S. Barr; Raphael W. Bostic; Michelle W. Bowman; Lisa D. Cook; Mary C. Daly; Philip N. Jefferson; Adriana D. Kugler; Loretta J. Mester; and Christopher J. Waller..."

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 The United States Prime Rate was raised to the current 8.50% on July 26, 2023.

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