News
Live updates on the June Fed rate decision
3 minutes ago
Fed needs more “good data” on inflation, says Powell
This year’s inflation data has not yet given the Federal Reserve “greater confidence” that it is approaching the 2% target, according to Fed Chairman Jerome Powell.
“We will need more good data to reinforce our confidence that inflation is moving sustainably towards 2%,” he said.
In the Fed statement, central bank leaders acknowledged that there had been “modest” further progress in reducing price growth to 2%. Earlier, the Fed had said there was a “lack” of recent progress.
-Alex Harring
6 minutes ago
Higher prices show signs of easing, based on recent readings, says Powell
The most recent series of inflation readings shows signs of easing price pressures, according to Federal Reserve Chairman Jerome Powell.
“Inflation data received earlier this year was higher than expected, although the most recent monthly readings were down a bit,” Powell said Wednesday. “Long-term inflation expectations appear well anchored.”
-Brian Evans
8 minutes ago
Inflation ‘has decreased substantially’ but is still too high, says Powell
Inflation has declined substantially since its peak, but remains too high, Federal Reserve Chairman Jerome Powell said during his press conference on Wednesday.
“Our economy has made considerable progress… the labor market has achieved a better balance, with continued strong employment gains and a low unemployment rate,” he said. “Inflation has declined substantially, from a peak of 7% to 2.7%, but it is still too high. We are strongly committed to returning inflation to our 2% target, in support of a strong economy that benefits everyone.”
The Fed maintains its tight stance on monetary policy, Powell added.
-Pia Singh
10 minutes ago
Federal Reserve is ‘obligated to keep rates higher for longer,’ economist says
The Federal Reserve will likely keep interest rates high as it seeks sustainable progress toward its 2% inflation target, an economist said.
“There is no denying progress toward the Fed’s 2% target, but the real debate is the deadline. Barring any exogenous shocks, the economy will slowly converge toward the Fed’s target,” wrote Jeffrey J. Roach, chief economist at LPL Financial.
“Because parts of the economy are less sensitive to interest rates in this economic cycle, the Fed is forced to keep rates higher for longer,” Roach added.
-Sarah Min
12 minutes ago
Economy has made progress toward both Fed goals, Powell says
Federal Reserve Chairman Jerome Powell began his press conference by noting that the US economy has made progress toward both of the central bank’s goals: reducing inflation to 2% and maximizing employment.
“Our economy has made considerable progress toward both goals in recent years,” Powell said.
“The labor market has achieved a better balance, with continued strong employment gains and a low unemployment rate. Inflation has declined substantially since [about] 7% to 2.7%. But it’s still too high,” he said.
—Fred Imbert
16 minutes ago
A question for Powell: How did Wednesday’s CPI report factor into the projections?
How much of Wednesday’s CPI report factored into the Fed’s projections is one of the things traders will be looking for at Powell’s press conference, according to Seema Shah, chief global strategist at Principal Asset Management.
“A key question for Powell will be: Did the FOMC know the inflation print before presenting its projections? If it did, this would perhaps imply that they need more than three months of softer inflation prints before they can be convinced to cut inflation fees.” Shah said in a note.
-Jesse Pound
30 minutes ago
Stocks Hold Gains After Fed Highlights “Modest” Progress on Inflation
The Federal Reserve has maintained a firm grip on interest rates, but is only calling for a rate cut in 2024.
The S&P 500 and Nasdaq Composite maintained their gains as of 2:19 p.m. ET, with the broad-market benchmark rising 1% and the technology-heavy index rising nearly 1.8%.
The Dow Jones Industrial Average added around 32 points.
—Darla Mercado
39 minutes ago
See what changed in the Fed’s new statement
In the Fed’s statement released Wednesday, central bank leaders acknowledged that they have begun to see “modest” progress toward the 2% inflation target. Click here to see a comparison of the most recent and previous statements.
-Alex Harring
41 minutes ago
Federal Reserve Holds Rates Stable, Predicts a Rate Cut This Year
The central bank kept its interest rate unchanged at between 5.25% and 5.5%, but removed two rate cuts from the table for this year.
The Federal Open Market Committee adjusted its rate forecast for one reduction this year, down from three in March.
“In recent months, there has been modest progress towards the Committee’s 2 percent inflation target,” the policymakers said in their statement.
Read more from CNBC’s Jeff Cox on the Fed’s latest statement and your outlook for rates here.
—Darla Mercado
58 minutes ago
Here’s where markets stand ahead of the Fed’s rate decision at 2pm ET
O S&P 500 and the Nasdaq Composite rose on Wednesday, driven by the cooler-than-expected May consumer inflation report.
At around 1:50 pm ET, this is where the main market averages were. The S&P 500 rose about 1%, while the Nasdaq jumped nearly 1.8%. Both indices reached new all-time highs in the session.
O Dow Jones Industrial Average was the laggard, rising around 22 points.
Treasury yields declined, with the 10 year note falling more than 13 basis points to 4.266%. The tax on 2 year note fell nearly 14 basis points to 4.695%. Bond yields move inversely to their prices. One basis point is equal to one hundredth of one percent.
—Darla Mercado
One hour ago
Don’t get too excited about rate cut prospects just yet, even after CPI, says director Shah
May’s consumer price index reading – which was flat on a monthly basis and rose 3.3% from a year earlier – raises hopes for rate cuts from the Federal Reserve, but investors should keep optimism in check, warns Seema Shah, chief global strategist at Principal Asset Management.
“Today’s soft inflation print eases fears that labor market strength could drive renewed inflation strength and likely bolsters President [Jerome] Powell’s conviction that the hot first quarter inflation data was just a bump in the road,” she said.
“While current inflation data keeps a Fed cut in September firmly in the picture, it does not reopen the door for a cut in July,” she added. “The Fed will need today’s evidence of softer price pressures to also be borne out in inflation prints in the coming months before it can be confident enough to ease.”
—Darla Mercado
One hour ago
This is where consumer rates are ahead of the Fed’s decision
The Federal Reserve’s rate hike campaign has had a notable effect on consumers’ wallets, increasing the income they earn from savings while also increasing financing costs.
The CNBC data team compared the rate situation ahead of the March 2022 Fed meeting – where it began raising rates this latest cycle – with last week.
Consumers are shelling out more to cover mortgage interest costs, with the 30-year fixed loan rate reaching 7.15%, according to Mortgage News Daily. This is compared to the rate of 4.29% immediately before the Fed’s initial move to raise rates. Credit card rates also jumped more than 400 basis points to 20.68% last week, up from 16.34% two years ago, per Bankrate.
However, when it comes to saving, consumers’ fortunes have improved. The annual percentage yield on a six-month certificate of deposit is now 3.406%, up from 0.22% in March 2022, per LendingTree. The higher rates were also a boon for fixed-income investors, as the 10-year Treasury yield hit 4.4% last week, compared with the rate of just over 2% in March 2022, it found. Refinitiv.
-Darla Mercado, Nick Wells
One hour ago
All eyes are on the Fed’s dot plot as traders seek clarity on rate cut path
Traders will focus on the Federal Reserve dot chart interest rate expectations as the central bank concludes its policy meeting.
The dot chart, a quarterly report that shows the direction of the federal funds rate that policymakers see, is closely watched by traders.
Previously, the Fed had indicated three rate cuts for 2024, but given the recent burst of strong employment reports and other upbeat economic data, many expect the forecast to show two cuts.
The central bank’s updates – and its latest rate decision – will be released just hours after May consumer price index reading. On a monthly basis, the core CPI reading has held steady since April but is up 3.3% from a year ago, according to the Bureau of Labor Statistics.
-Darla Mercado, Jeff Cox