US Federal Reserve Announces June 2023 Interest Rate Decision and Inflation Declines

Investing.com – The US Federal Reserve announced a rate for June 2023, locking it in place for the first time since March 2022. The interest rate stands at 5.00%-5.25%.

A series of data was released showing that inflation is declining in the US:

• On an annual basis, it recorded 4.00% for the month of May, while expectations were 4.1%.
• The basis recorded on an annual basis was 5.3%, matching expectations
• Today, the index for the month of May, compared to last year, increased by 1.1%.
• Today’s primary record is 2.8%.

However, the market sees that the Fed has not finished the tightening cycle yet, so the interest rate hike expectations will increase again for the month of July, and the interest rate cut expectations will increase by the end of this year.

The most important details:

• Most members see the possibility of a rate cut in 2024.
• The decision to install interest was unanimous
• Officials see inflation at 3.2% by the end of 2023, and 2.5% by the end of 2024.
• Officials see core inflation at 3.9% by the end of 2023, and 2.6% by the end of 2024.
• Officials see the final interest rate for 2023 at 5.6%.
• The Fed sees stronger GDP growth, lower unemployment, and a slowdown in core inflation compared to the numbers released in March.
• The Fed intends to raise rates again later this year
• The committee says that economic activity continues to expand at a modest pace
• Fixing interest allows evaluating the results of monetary policy
• Interest forecast swaps do not see a rate cut this year
• Fed officials see GDP at 1% this year, and 1.1% next year
• Swap traders see interest rising to 5.35% in September
• The median interest rate expectation rises to 5.6% by the end of next year
• The Fed stated that it will continue to tighten monetary policy by reducing holdings of Treasury and mortgage securities.

Market monitoring

The American is making up for some of its losses after the markets retreated from interest rate expectations, to record 102.835.

It loses all profits, with futures contracts recording a decline of 0.13% at $1,955 an ounce, and spot contracts recording $1,943 an ounce, with expectations of continuing to raise interest rates during the next year, and the continuation of the monetary tightening policy.

Oil lost its gains today, recording a decline of 1.29%, to reach a price of $73.32 per barrel, on the back of growth at a modest pace that the Fed sees. West Texas Intermediate B crude oil is down 1.30%, reaching $68.45 a barrel.

US index futures fell strongly, losing 369 points, with the S&P losing 0.44% and the Nasdaq losing 0.43%.