FOMC

Donald Trump

Many economists speculate about what will happen during the November 6 and 7 Federal Open Market Committee (FOMC) meeting. Most observers expect a lower rate cut of 25 basis points. In the event of a rate cut, bank borrowing rates will be between 4.50% and 4.75% from 4.75% to 5.00%.&nbsp; 
According to the CME Group Fedwatch Tool, the probability of a 25% rate cut is about 98.9% as of November 7. However, there is still a 1.1% chance that the Fed will decide to make a 50% rate cut, bringing the borrowing rate to 4.25% and 4.50%.&nbsp; 
More importantly, Fed officials have hinted at a gradual approach to rate cuts over the next few months, suggesting that subsequent ones will not be as aggressive. The FOMC still hopes inflation will drop to 2.1%, rivaling September’s 2.4% and closing on the central bank’s 2% inflation rate target.&nbsp; 
The last FOMC meeting, held on September 18, saw the Fed cut rates for the first time since the pandemic. Back then, not all economists expected the Fed’s aggressive approach, cutting interest rates by 50 basis points. The rate cuts aimed to reduce the rate people could access loans while encouraging spending.&nbsp; 
<h3 id="span-style-font-weight-400-mixed-expectations-for-bond-yields-and-treasury-interest-rates-span">Mixed expectations for bond yields and treasury interest rates</h3> 
Since the FOMC’s September 18 rate cuts, bond yields have risen exponentially, leading to more speculation about what will happen after this month’s FOMC press conference. 
Economists have explained that rising Treasury bill yields are due to increased uncertainty caused by the U.S. presidential elections and rising debt.&nbsp; 
Mortgage rates have also been increasing, making consumers question whether real estate will get cheaper after the Fed meeting. According to Freddie Mac, mortgage rates are up to 6.72% for a 30-year fixed-rate loan, up from September’s low of 6.08%.&nbsp; 
Jacob Channel, a senior economist at LendingTree, suggested that investors worry that the country’s economic future will make it difficult for bond yields and mortgage rates to stay low.&nbsp; 
<blockquote>
 “As long as investors remain worried about what the future may bring, Treasury yields, and, by extension, mortgage rates are going to have a tough time falling and staying down.” 
 –<a href="https://www.cbsnews.com/news/fed-meeting-rate-cut-2024-interest-rate-decision/" rel="nofollow noopener" target="_blank">Jacob Channel, Senior Economist LendingTree</a>
</blockquote> 
<h3 id="span-style-font-weight-400-trump-promises-to-have-more-influence-on-fomc-rate-cuts-span">Trump promises to have more influence on FOMC rate cuts</h3> 
President-elect Donald Trump mentioned during his campaign trail that he hoped to have more influence on future rate cuts in the country. Mentioning his <a href="https://www.cnn.com/2024/10/24/business/trump-second-presidency-global-economic-impact/index.html?cid=external-feeds_iluminar_msn" rel="nofollow noopener" target="_blank">plans</a> during his tariffs proposal, Trump also promised to cut taxes, increase international import tariffs, and reduce immigration.&nbsp; 
Following his election success, economists now expect fewer rate cuts. Additionally, many analysts suggest that Trump’s <a href="https://www.reuters.com/markets/rates-bonds/federal-reserve-seen-shallower-rate-cut-path-after-trumps-election-2024-11-06/" rel="nofollow noopener" target="_blank">ruling</a> could significantly hike inflation, increase unemployment, and cost the U.S. economy in the long run.&nbsp; 
Some analysts suggested a shift in monetary policies to prevent a restrictive economy. Most analysts still hope to get a clearer picture of the President-elect’s vision of the economy in his first months in office.

What to expect ahead of today’s Federal Open Market Committee (FOMC) meeting

Table of Contents

Cryptopolitan_News

Other articles published on Nov 7, 2024

Former Binance CEO Opens the Door to New Offers on His Stake

Senator Lummis Proposes U.S. Bitcoin Reserve

XRP Price Projection: Possible 11% Decline Causes Investors To Move Into AI Coin For 17,000% ROI ...

The Rise in the BTC-Gold Ratio Reaches Its Highest Level Since 2022! What Does It Mean?

Binance Coin (BNB) Price Prediction for November 7

Dogecoin Surges Amid Musk and Trump Connections

Join our free newsletter for daily crypto updates!