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  • Dec 18, 2024

Dollar flat before Fed meeting, 2025 rate outlook in focus

(Reuters) -The U.S. dollar held firm on Wednesday before the Federal Reserve policy meeting later in the session which is expected to deliver a hawkish cut, trimming rates but suggesting less monetary easing ahead. Analysts recalled that the assumption that the Fed would reduce its level of 2025 easing had propped up the dollar recently, while markets kept pricing a 25 basis point rate cut. "We foresee a hawkish shift in the dot plot, consistent with the movement in market expectations since the last update in September," said David Doyle, head of economics at Macquarie.

  • Dec 18, 2024

Fed expected to combine interest rate cut with hawkish 2025 outlook

WASHINGTON (Reuters) -The Federal Reserve is expected to lower borrowing costs on Wednesday in what some observers are calling a "hawkish cut" set to be delivered alongside policymakers' updated interest rate outlooks and economic forecasts covering the first months of the incoming Trump administration. The anticipated quarter-percentage-point move would lower the U.S. central bank's benchmark policy rate to the 4.25%-4.50% range, a full percentage point below where it stood in September when it began easing the tight monetary policy used to counter a surge in inflation that began in 2021. How much further and how fast rates will fall next year remains increasingly uncertain with inflation still lodged above the Fed's 2% target, the economy growing faster than expected, and the prospect that President-elect Donald Trump's tariff, tax and immigration policies could change the economic landscape in unpredictable ways once he takes office in January.

  • Dec 18, 2024

Morning Bid: Markets edgy as Fed awaited

For all the extreme bullishness about 2025, Wall Street is just a bit edgy as the Federal Reserve looks set to deliver its final interest rate of 2024 and give a glimpse into next year. Remarkably, the Dow Jones Industrial Average's 9-day losing streak is the longest negative run since 1978 - but the index is still just under 4% from record highs set earlier this month. As Treasury yields have backed up sharply again over the past fortnight - even as the latest U.S. industrial production and retail sales excluding autos missed forecasts for last month - the yearend is looking more anxious than ebullient new year forecasts suggest.

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