USD Initially Lower After FOMC Statement

The Federal Reserve has decided to maintain the fed funds target range at 5.25-5.50% as the FOMC statement showed, as markets were expecting

Skerdian Meta•Wednesday, March 20, 2024•1 min read

This FOMC policy meeting holds enormous importance

The Federal Reserve has decided to maintain the fed funds target range at 5.25-5.50% as the FOMC statement showed, in line with market expectations. Notably, the key statement regarding the appropriateness of reducing the target range until greater confidence in inflation reaching 2 percent was left unchanged from the previous meeting.

EUR/USD Chart H1 – 40 Pip Jump Before Giving It Back

The statement acknowledges that job gains have remained strong, a slight alteration from the previous statement that mentioned job gains moderating since early last year but remaining strong. Additionally, it reiterates that while inflation has eased over the past year, it remains elevated.

The dot plot still indicates a total of 75 basis points in rate cuts for the year, but there are fewer projected cuts for 2025 and 2026. The median projection for 2024 core PCE inflation has been revised up to 2.6% from 2.4% previously, with the central tendency on PCE inflation also edging up.

Federal Reserve Interest Rate Decision Highlights March 2024

Fed funds target range remains 5.25-5.50%, as widely expected
Previously, the key line was “The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent” — this was unchanged
Statement says job gains have remained strong, rather than “job gains have moderated since early last year but remain strong”
Repeats: Inflation has eased over the past year but remains elevated
Dots continue to show 75 bps in cuts this year but show fewer in 2025 and 2026
2024 core PCE median seen at 2.6% vs 2.4% prior
Central tendency on PCE inflation edges up
No mention in the statement of the balance sheet or tapering

The FED DOT Plot

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Open a FREE Trading Account

ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.