Eighth and Final FOMC Meeting of 2024 Adjourned: United States Prime Rate Is Now 7.50%

United States Prime Rate

The Federal Open Market Committee (FOMC) of the Federal Reserve System has just adjourned its eighth and final monetary policy meeting of 2024 and, in accordance with our latest forecast, has voted to lower the benchmark target range for the federal funds rate by 25 basis points (0.25 percentage point) from 4.50% - 4.75% to 4.25% - 4.50%. Therefore, the United States Prime Rate (a.k.a the Fed Prime Rate) is now 7.50%.

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. Since earlier in the year, labor market conditions have generally eased, and the unemployment rate has moved up but remains low. Inflation has made progress toward the Committee's 2 percent objective but remains somewhat elevated.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.

In support of its goals, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 4-1/4 to 4-1/2 percent. In considering the extent and timing of additional 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 will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent 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; and Christopher J. Waller. Voting against the action was Beth M. Hammack, who preferred to maintain the target range for the federal funds rate at 4-1/2 to 4-3/4 percent..."

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Odds Now At 95% (Very Likely) The U.S. Prime Rate Will Be Cut to 7.50% at the December 18, 2024 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 95% (very likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to lower the benchmark target range for the fed funds rate (TRFFR) by 0.25 percentage point (25 basis points [bps]) at the December 18^TH, 2024 monetary policy meeting.


A 25 bps cut would cause Prime to decrease, from the current 7.75%, to  7.50%. 

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• Year-on-year (Y-O-Y), the  CORE Consumer Price Index edged lower, from 3.33% during October, to 3.32% during November, 2024.
  
  
• Y-O-Y, from September to October, 2024, the CORE PCE Price Index rose from 2.7% to 2.8%.
  
  
  
• On the jobs front, Y-O-Y, the U-3 (Headline) Unemployment Rate ticked up, from 4.1% during October, 2024, to 4.2% during November.
  
  It was 3.7% during November, 2023.
  

• Y-O-Y, the reading on Average Hourly Earnings was +4.03%, while Average Weekly Earnings was +3.73%.

Stay tuned...

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The United States Prime Rate was lowered to the current 7.75% on November 7, 2024.

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SUMMARY

• Current odds the U.S. Prime Rate will be cut to 7.50% at the December 18^TH, 2024 FOMC monetary policy meeting: 95% (very likely.)
  

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Odds Now At 60% (On The Fence) The U.S. Prime Rate Will Be Cut to 7.50% at the December 18, 2024 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 60% (on the fence) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to lower the benchmark target range for the fed funds rate (TRFFR) by 0.25 percentage point (25 basis points [bps]) at the December 18^TH, 2024 monetary policy meeting.


A 25 bps cut would cause Prime to decrease, from the current 7.75%, to  7.50%. 

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• Year-on-year (Y-O-Y), the CORE PCE Price Index moved sideways from August to September -- 2.7% to 2.7%.
  
  
• Y-O-Y, from August to September, the PCE Price Index eased, from 2.3% to 2.1%.

Stay tuned...

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The United States Prime Rate was lowered to the current 7.75% on November 7, 2024.

=======

SUMMARY

• Current odds the U.S. Prime Rate will be cut to 7.50% at the December 18^TH, 2024 FOMC monetary policy meeting: 60% (On The Fence.)
  

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Seventh FOMC Meeting of 2024 Adjourned: United States Prime Rate Is Now 7.75%

United States Prime Rate

The Federal Open Market Committee (FOMC) of the Federal Reserve System has just adjourned its seventh monetary policy meeting of 2024 and, in accordance with our latest forecast, has voted to cut the benchmark target range for the federal funds rate by 25 basis points (0.25 percentage point) from 4.75% - 5.00% to 4.50% - 4.75%. Therefore, the United States Prime Rate (a.k.a the Fed Prime Rate) is now 7.75%.

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. Since earlier in the year, labor market conditions have generally eased, and the unemployment rate has moved up but remains low. Inflation has made progress toward the Committee's 2 percent objective but remains somewhat elevated.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.

In support of its goals, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 4-1/2 to 4-3/4 percent. In considering additional 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 will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent 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; Beth M. Hammack; Philip N. Jefferson; Adriana D. Kugler; and Christopher J. Waller..."

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Odds Now At 99% (VERY LIKELY) The U.S. Prime Rate Will Be Cut By At Least 25 Basis Points (0.25 Percentage Point) at the November 7, 2024 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 99% (very likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to lower the cardinal target range for the fed funds rate (TRFFR) by at least 0.25 percentage point (25 basis points [bps]) at the November 7^TH, 2024 monetary policy meeting.

A 25 bps cut would cause Prime to decrease, from the current 8.00%, to  7.75%. 

A 50 bps cut would lower the TRFFR to a range of 4.25% - 4.50%, and would result in a Prime Rate of 7.50%, a level not seen since December of 2022.

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• Year-on-year (Y-O-Y), the Core PCE Price Index rose from +2.6% during July, to +2.7% during August, 2024.

Y-O-Y, the Core CPI for August, 2024 came in at +3.197%.

Stay tuned...

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The United States Prime Rate was lowered to the current 8.00% on September 18, 2024.

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SUMMARY

• Current odds the U.S. Prime Rate will be cut to 7.75% or lower at the November 7^TH, 2024 FOMC monetary policy meeting: 99% (very likely.)
  

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Sixth FOMC Meeting of 2024 Adjourned: United States Prime Rate Is Now 8.00%

United States Prime Rate

The Federal Open Market Committee (FOMC) of the Federal Reserve System has just adjourned its sixth monetary policy meeting of 2024 and, in accordance with our latest forecast, has voted to cut the benchmark target range for the federal funds rate by 50 basis points (0.50 percentage point) from 5.25% - 5.50% to 4.75% - 5.00%. Therefore, the United States Prime Rate (a.k.a the Fed Prime Rate) is now 8.00%.

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 slowed, and the unemployment rate has moved up but remains low. Inflation has made further progress toward the Committee's 2 percent objective but remains somewhat elevated.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.

In light of the progress on inflation and the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/2 percentage point to 4-3/4 to 5 percent. In considering additional 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 will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent 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; Lisa D. Cook; Mary C. Daly; Beth M. Hammack; Philip N. Jefferson; Adriana D. Kugler; and Christopher J. Waller. Voting against this action was Michelle W. Bowman, who preferred to lower the target range for the federal funds rate by 1/4 percentage point at this meeting..."

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Odds Now At 95% (VERY LIKELY) The U.S. Prime Rate Will Be Cut By At Least 25 Basis Points (0.25 Percentage Point) at the September 18, 2024 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 95% (very likely) the Federal Open Market Committee (FOMC) will vote to LOWER the benchmark target range for the fed funds rate (TRFFR) by at least 25 basis points (bps) at the September 18^TH, 2024 monetary policy meeting.

If a 25 bps cut happens, the United States Prime Rate (a.k.a Fed Prime Rate) would decline from the current 8.50%, to  8.25%. 

There is also a very real chance that the FOMC will cut by 50 bps next month, setting the TRFFR at 4.75% - 5.00%.  This would result in a U.S. Prime Rate of 8.00%, a level not seen since March of 2023.

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Year-on-year (Y-O-Y), the Core PCE Price Index for June, 2024 came in at +2.6%.

Y-O-Y, the Core CPI for June, 2024 came in at +3.27%.

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Eurodollar LIBOR Has An Excellent Record of Predicting
Recessions for The American Economy
  

Over the years, U.S. dollar (Eurodollar) LIBOR rates have been good at predicting what's in the economic offing for the American economy.

Right now, there is an inversion in USD LIBOR rates.  Current rates (August 2, 2024) are as follows:

• 1-Month LIBOR: 5.46652%
  
• 3-Month LIBOR: 5.48934%
  
• 6-Month LIBOR: 5.43589%

The 6-month rate is lower than the 3-month rate, which = economic concerns ahead!  

Is LIBOR a better prognosticator than the Treasury yield curve or the LEI?  Our thesis = 👍 Yes! 🙌

• Meanwhile, tensions in the Middle East have become so volatile that evacuation orders have been issued.

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 be cut to 8.25% or lower at the September 18^TH, 2024 FOMC monetary policy meeting: 95% (very likely.)
  

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Fifth 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 fifth 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 moderated, and the unemployment rate has moved up but remains low. Inflation has eased over the past year but remains somewhat elevated. In recent months, there has been some further progress toward the Committee's two percent inflation objective.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals continue to move into better balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.

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 percent. 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 percent. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to returning inflation to its 2 percent 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; Austan D. Goolsbee; Philip N. Jefferson; Adriana D. Kugler; and Christopher J. Waller. Austan D. Goolsbee voted as an alternate member at this meeting..."

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

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Odds Now At 90% (VERY LIKELY) The U.S. Prime Rate Will Remain at 8.50% After The July 31, 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 July 31^ST, 2024 monetary policy meeting, with the United States Prime Rate (a.k.a Fed Prime Rate) holding at 8.50%.

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Futures Market Has No Idea Where Where Short-Term Rates Will Be at The End of This Year
  

Current Interest-Rate-Futures Market Predictions for
the December 18, 2024 FOMC Policy Meeting

Nice △pyramid△ this 👆🔺👆 chart is, n'est-ce pas?

Right now, a 44% majority believe that the Fed will have cut rates by 50 basis points (0.50 percentage point) by the end of 2024.  If they're right, that would put the U.S. Prime Rate at an even 8.00% at year-end.

• From the May Jobs Report: Year-on-year (Y-O-Y), Average Weekly Earnings advanced by +4.08%, while the reading on Average Weekly Earnings was +3.78%
  
  
  • The U-3 (official) jobless rate edged higher, from 3.9% during April, to 4.0% during May, 2024.
  
  
• Y-O-Y, the Core CPI for May, 2024 came in at +3.42%.
   

Stay tuned...

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

=======

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

======= 

Current Odds

• Current odds the U.S. Prime Rate will remain at 8.50% after the July 31^ST, 2024 FOMC monetary policy meeting: 90% (very likely.)
  

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Fourth FOMC Meeting of 2024 Adjourned: United States Prime Rate Holds at 8.50%

United States Prime Rate

The Federal Open Market Committee (FOMC) of the Federal Reserve System has just adjourned its fourth 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 modest further progress toward the Committee's 2 percent inflation objective.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent 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 percent. 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 percent. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to returning inflation to its 2 percent 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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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.

=======

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

======= 

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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Odds Now At 95% (VERY LIKELY) The U.S. Prime Rate Will Remain at 8.50% After The May 1, 2024 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 95% (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 May 1^ST, 2024 monetary policy meeting, with the United States Prime Rate (a.k.a Fed Prime Rate) holding at 8.50%.

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Latest on Disinflation
 

• Year-on-year (Y-O-Y), the Core Consumer Price Index (CPI) slipped from 3.86% during January, to 3.75% during February, 2024. Good disinflation news...but not great.

• Y-O-Y, The Core PCE Price Index moved sideways, remaining at 2.8% from January to February of this year. With food + energy added to the mix, the PCE Price Index edged in the wrong direction: up, from 2.4% to 2.5%.

Wages

• Y-O-Y, average hourly + average weekly earnings advanced in sync, both by 4.14%, according to last Friday's Employment Situation Report for March, 2024.

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And so, based on these and other economic data, the Fed is likely to do nothing with the benchmark fed funds target rate on May 1^ST, 2024, which would mean Prime staying where it is until the following meeting and decision on short-term rates (June 12, 2024.)

Stay tuned...

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

=======

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

======= 

Current Odds

• Current odds the U.S. Prime Rate will remain at 8.50% after the May 1^ST, 2024 FOMC monetary policy meeting: 95% (very likely.)
  

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Second FOMC Meeting of 2024 Adjourned: United States Prime Rate Holds at 8.50%

United States Prime Rate

The Federal Open Market Committee (FOMC) of the Federal Reserve System has just adjourned its second 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 been expanding 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.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals are moving into better balance. 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 percent. 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 percent. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent 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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