Discussing the current and future macroeconomic environment and how it effects businesses and consumers.
The Federal Reserve's Federal Open Market Committee (FOMC) released a monetary policy statement on June 12, 2024. Here's what you need to know:
The U.S. economy continues to expand at a solid pace, with strong job gains and low unemployment. Inflation has eased over the past year but remains elevated.
The Committee maintained the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. They do not expect to reduce this range until they are confident that inflation is moving sustainably toward the 2 percent objective.
The Committee will continue reducing its holdings of Treasury securities, agency debt, and agency mortgage-backed securities.
The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks. They will monitor various economic indicators and are prepared to adjust monetary policy if needed.
The vote for the monetary policy action was unanimous among the 12 Committee members.
The Board of Governors voted unanimously to maintain the interest rate paid on reserve balances at 5.4 percent and the primary credit rate at 5.5 percent.
The Committee provided detailed instructions to the Open Market Desk at the Federal Reserve Bank of New York for executing transactions in the System Open Market Account.
In summary, the Fed is maintaining a cautious stance, keeping interest rates steady and continuing to reduce its balance sheet, while closely monitoring inflation and standing ready to adjust policy if necessary.
See the full report here: https://www.federalreserve.gov/monetarypolicy/fomcpresconf20240612.htm
Discover assets like this one.
What does this mean for you?
Review your investments: Keep an eye on your portfolio and consider diversifying to manage risk in light of potential stock market fluctuations.
Support your local small businesses: Small businesses might be feeling the pinch of higher borrowing costs, so consider showing them some love. Shop local when you can, and if you're a business owner yourself, look for ways to minimize debt and operate efficiently.
Be cautious with big purchases: Higher interest rates could mean higher monthly payments on homes, cars, and other large purchases. Make sure they fit within your budget.