The US Federal Reserve (FED) kept interest rates unchanged last night, as expected. Following the FED decision, FED Chairman Jerome Powell, in verbal remarks, hinted at the possibility of a two-pronged approach to interest rates.
Powell stated that the possibility of raising interest rates was also discussed at the last meeting, but added that it was not considered a primary scenario.
Powell’s remarks indicate that the Fed is taking a cautious approach to basing its policy decisions on data, leaving both interest rate cuts and rate increases open as possible options.
The Fed also added that it plans to cut interest rates once in 2026 and once in 2027.
For March, it was reported that FED member Stephen Miran opposed the decision and advocated for interest rate cuts.
Following the Fed’s interest rate decision, expectations for interest rate hikes in April and June are beginning to reshape, with the probability of a 25 basis point increase in April falling to 1%.
According to CME FedWatch data, the following conclusions emerged after the Fed’s March interest rate decision.
“The probability of interest rates remaining unchanged in April is 95.9%, while the probability of a 25 basis point rate increase is 4.1%. No rate cuts are expected.”
“The probability of interest rates remaining unchanged in June is 90.9%; the probability of a 25 basis point rate cut is 5.2%; and the probability of a 25 basis point rate increase is 3.9%.”
The next two FOMC meetings will be held on April 29 and June 17.
*This is not investment advice.