Notes From the Desk: FOMC Decision – Higher for Longer.
As expected the FOMC held rates steady, while leaving the door open for one more hike this year.
The noteworthy.
The significant changes are to be found in the infamous ‘dot-plot’ which shows that FOMC members reduced the magnitude of cuts in 2024 from 100 bps to 50 bps.
They still believe that rates are high enough to bring inflation down to 2% without triggering a deep slowdown (i.e. soft landing).
The market reaction.
With the bond market having shifted to the ‘higher for longer’ narrative this summer the reaction in yields has been modest, with the curve inverting a little bit more.
