Fed Holds Interest Rates Steady: Dot Plot Signals 3 Rate Cuts In 2024, Fewer Reductions In 2025, 2026
Portfolio Pulse from Piero Cingari
The Federal Reserve maintained interest rates at 5.25%-5.5% during its March meeting, with projections indicating three rate cuts in 2024, fewer reductions in 2025 and 2026. Economic growth projections for 2024-2026 were revised upwards, while the unemployment rate for 2024 was slightly reduced. Following the announcement, the SPDR S&P 500 ETF Trust (SPY) rose 0.4%, the Invesco DB USD Index Bullish Fund ETF (UUP) fell 0.2%, and the SPDR Gold Trust (GLD) increased by 0.8%.
March 20, 2024 | 6:13 pm
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POSITIVE IMPACT
The SPDR Gold Trust (GLD) increased by 0.8% following the Federal Reserve's interest rate decision.
GLD's rise can be attributed to gold's increased attractiveness as an investment in the context of the Fed's future rate cuts and the potential for a weaker dollar.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
The SPDR S&P 500 ETF Trust (SPY) rose 0.4% following the Fed's interest rate announcement and economic projections.
The rise in SPY reflects positive investor sentiment towards the Fed's decision to maintain interest rates and its optimistic economic projections for the coming years.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
The Invesco DB USD Index Bullish Fund ETF (UUP) fell 0.2% in response to the Fed's announcement.
UUP's decline is likely due to the Fed's dovish stance on future interest rates, which can decrease demand for the U.S. dollar.
CONFIDENCE 90
IMPORTANCE 60
RELEVANCE 80