Ipek Ozkardeskaya
Swissquote Bank Ltd
The Federal Reserve’s (Fed) dot plot plotted one rate cut for 2024, down from three in March and the Fed revised its inflation forecasts higher. But the Fed’s announcement didn’t get more hawkish than this because the distribution of the dots was much narrower than in March, the dots also suggested 4 rate cuts in 2025 instead of 3, and the Fed tweak its communication slightly: they no longer think that there is a ‘lack’ of progress in inflation toward the 2% goal but a ‘modest further progress’ instead. And the cherry on top, the CPI update that came in a few hours before the policy announcement was softer-than-expected.
As reaction, the US yields and the dollar fell, equities and oil rallied. If all goes well, the optimism and the reflation trade will continue to shape sentiment early summer – except for France, where unrest mounts.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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