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]) atthe November 7TH, 2024monetary 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.
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..."
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) atthe September 18TH, 2024monetary 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 at4.75% - 5.00%. This would result in a U.S. Prime Rate of 8.00%, a level not seen since March of 2023.
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 at5.25% - 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..."
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 at5.25% - 5.50%at the July 31ST, 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 onAverage Weekly Earnings was +3.78%
The U-3 (official) jobless rate edged higher, from 3.9% during April, to 4.0% during May, 2024.
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 at5.25% - 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. Inflationhas 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..."
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 at5.25% - 5.50%at the June 12TH, 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%.)
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 at5.25% - 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 inflationgoals have moved toward better balance over the past year. The economic outlook is uncertain, and the Committee remains highly attentive toinflation 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 thatinflation 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 returninginflation 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..."
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 at5.25% - 5.50%at the May 1ST, 2024 monetary policy meeting, with the United States Prime Rate (a.k.a Fed Prime Rate) holding at 8.50%.
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%.
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 at5.25% - 5.50%. Therefore, the United States Prime Rate (a.k.a the Fed Prime Rate) continues at 8.50%.
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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