CENTRAL BANKS ARE CAUTIOUS ON POLICY RATES

Wednesday, June 19 2024

Despite the decline in the Headline CPI in US to 3.3% YoY from 3.4% and the decline of the core inflation to 3.4% YoY from 3.6%, the Fed kept the Federal Funds Rate (FFR) unchanged. The rate softening possibility has shifted to the month of September (2024) now. If disinflation continues according to the Fed’s 2 per cent target, then there could be chances of two rate cuts in this year. Nevertheless, this is a matter of crossing fingers’, since the previous market expectation of three rate cuts in 2024 yet not materialised.

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