Inside The Temple: Lifting The Curtain on The Fed
By John Persinos
Federal Reserve monetary policy has been a major financial story for the past few years.
And today, the Fed made headlines again by announcing that it is again keeping its benchmark interest rate at the same place it's been since July of last year.
Surprise, surprise.
The Fed also indicated that investors should expect only one rate cut by the end of 2024. That's a far cry from the beginning of the year, when the markets were pricing in the likelihood of six cuts in 2024.
"Inflation has eased over the past year but remains elevated," the Fed's post-meeting statement said. "In recent months, there has been modest further progress toward the [Federal Open Market Committee's] 2% inflation objective."
Whoever happens to be in charge of the Fed dominates our lives, like a demi-god. During his press conference today, Fed Chair Jerome Powell will likely once again prove that he has the power to move markets.
Of course, many investors remain afraid that the Fed's policies will tip the economy into a recession.
Recent data indicates that the Fed's policies are finally starting to work, and that inflation is beginning to cool.
As the following chart shows, the fed funds rate currently stands at 5.33%.
The new targeted rate range is between 5.25% and 5.5%.
These Fed-related events are transparent and public, garnering plenty of coverage in mainstream news outlets. But let's lift the curtain on the more arcane aspects of the Fed. There's more to the Fed's policy moves than many investors realize.
Read This Story: Wall Street's Return to Normalcy
Average investors are familiar with the Federal Reserve System, our nation's central bank, so it requires little in the way of explanation. But few people can actually tell you much about the Federal Open Market Committee (FOMC), the Fed's monetary policy arm, aside from the fact that it sets the federal funds rate.
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