Fed Officials Still See Three Interest-Rate Cuts This Year By Hardika Singh
Central bankers expect the inflation slowdown to resume and maintain their lower-rate outlook. Meanwhile, the American dream is becoming harder to achieve for low-income consumers, and four tech companies objected to Apple's new app store policies related to payment for services. Read on for this news and more.
Top News Fed Officials Still See Three Interest-Rate Cuts This Year
Federal Reserve officials didn't significantly change their outlook for delivering interest-rate cuts later this year despite solid growth and firmer-than-anticipated inflation in recent months. Most officials penciled in three rate cuts in new projections, the same as in December. The central bank held steady its benchmark federal-funds rate in a range between 5.25% and 5.5%, a 23-year high.
Transcript: Fed Chief Jerome Powell's Postmeeting Press Conference Parsing the Fed: How the March Policy Statement Changed The Fed's Conundrum: Interest Rates Are Both Too High-and Too Low U.S. Economy The American Dream Accelerates Away From Those in the Slow Lane
Much of America's two-speed economy is powering ahead, but it's left a trail of destruction behind it. The laggards are starting to get into serious trouble, with the worst-hit, low-income consumers held back by powerful forces: higher interest rates, inflation and the depletion of pandemic-era support. This is terrible news for those left behind, and bad too for investors in the companies that sell to them. It's also hitting companies that are laggards themselves, indebted and caught out by changes in the economy.
Financial Regulation Roundup Apple Faces Legal Protest From Meta, Microsoft, X and Match
Meta Platforms, Microsoft, X and Match Group filed a legal petition protesting Apple's app store policies, objecting to how the tech giant has complied with a federal court ruling that ordered Apple to allow alternative payment methods.
Forward Guidance Thursday (all times ET)
4 a.m.: ECB General Council meeting
5 a.m.: Norges Bank interest rate decision
8:30 a.m.: U.S. weekly jobless claims
10 a.m.: U.S. existing-home sales for February
12 p.m.: Fed's Barr speaks at the Gerald R. Ford School of Public Policy
Friday
12 p.m.: Fed's Barr speaks at Transnational Law Conference on the International Law of Money
1 p.m.: ECB's Lane speaks at Aix-Marseille School of Economics
4 p.m.: Atlanta Fed's Bostic speaks at Household Finance Conference
Research Change in Fed's Rate-Cut Forecasts Would Impact USD/JPY Most Among G10 FX
A reduction in the Federal Reserve's rate-cut forecasts for 2024 would have had the biggest impact on the U.S. dollar against the Japanese yen, says Chris Turner, ING's global head of markets, in a note ahead of the policy announcement. Of all G10 currency pairs, the dollar against the yen has the strongest correlation with Fed rate expectations, ING calculates. USD/JPY rose Wednesday to a four-month high of 151.25 at 1700 ET. Above 151.945 would mark USD/JPY's highest level since 1990, according to FactSet. - Emese Bartha
Basis Points The Bank of England won't yet say it is home and dry in its task of bringing inflation back down to target, Victoria Clarke, U.K. chief economist at Santander CIB, says in a note. While labor-intensive services inflation is largely tracking BOE forecasts, upcoming data for April will be a critical point, with the near-10% rise in the minimum wage and many firms already having announced their living wage-linked pay increases, she says. - Edward Frankl. The Bank of Japan's policy normalization, which began this week with ending negative interest rates, could help improve South Korea's travel service balance, Nomura economist Jeong Woo Park says in a research note. The Japanese yen weakening to a 15-year low against the Korean won prompted a surge in the number of South Korean tourists visiting Japan in 2023, with South Korea's travel service deficit widening by 49% to $12.5 billion for the year, Park notes. - Kwanwoo Jun Senior Bank of Canada officials believed they would be in a position to cut interest rates this year, although they disagreed on when inflation would slow to a point to trigger such a move, according to a summary of central bank deliberations ahead of its March 6 policy decision. - Paul Vieira Feedback Loop
This newsletter is compiled by Hardika Singh in New York.
Send us your tips, suggestions and feedback. Write to:
[hardika.singh@wsj.com]
This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
03-21-24 0721ET
