(Finance) – At the Fed meeting that will end on June 12, Intesa Sanpaolo expects that the FOMC will leave rates unchanged for the seventh consecutive time at 5.25-5.50%. The tone of Powell’s statement and press conference may be less hawkish than at the May meeting, especially thanks to recent data that has shown moderation in inflation and economic growth.
The Fed should revise the Summary of Economic Projections (SEP) upwards relative to interest rates, with the dot chart expected to move upwards, now including one or two rate cuts in 2024, rather than the three expected in March.
“We maintain our forecast that the Fed can implement two rate cuts this year, with the first move expected in September. However, a single cut cannot be ruled out by the end of the year, especially if the labor market remains as strong as in May, and if the relatively reassuring data on the core PCE deflator for April are not confirmed or possibly strengthened in the coming months”, say the economists Paolo Mameli and Mario Di Marcantonio.
“THE CPI data for Mayexpected for the day the FOMC concludes, will be crucial to determine which of the two scenarios is more likely,” they added.
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