While All Eyes on Bitcoin Turn to the FED’s March Interest Rate Decision, FT Survey Says “The FED Will Have to Keep the Interest Rate Higher for a Long Time!” Said!

After the FED left the interest rate unchanged at 5.25-5.50 percent in January, the markets turned to the March interest rate decision this week.

When Will the January FED Interest Rate Decision Be Announced?

second of 2024 Fed While the interest rate decision is expected to have an impact on gold, dollar, oil and cryptocurrencies, FED will announce its March decision on March 20 at 21:00 CET.. FED President Jerome Powell will make a statement after the decision.

In Which Direction Are Expectations Concentrating?

While no reduction is expected in March in line with the statements made by Powell and FED members, According to CME Fed Watch, the probability of interest rates remaining stable is priced at 99%.

Because Powell stated in a recent statement that they do not foresee that it would be appropriate to reduce the policy rate until they have more confidence that inflation will move towards 2% in a sustainable manner.

FT Survey: FED Will Have to Keep Interest Rates High for Longer Than Expected!

While expectations focus on interest rates remaining constant, the Financial Times conducted a survey.

The Fed will have to keep interest rates higher for longer than markets and central bankers expect, according to academic economists surveyed by the FT.

More than two-thirds of the participants in the FT-Chicago Booth survey said that the FED has reached the final stage of its fight against inflation and is trying to complete this stage, and that they think the FED will make two or fewer cuts in 2024.

While participants were divided on the timing of the first interest rate cut between July and September, Harvard University Economist Jason Furman, who participated in the survey, said:

“The Fed really wants to lower interest rates. All his actions and statements are about interest rate cuts. But the data will make it difficult for them to do this.

“I expect the final phase of the inflation fight to be quite intractable.”

Vincent Reinhart, a former FED official who currently serves as Chief Economist at Dreyfus and Mellon, said that although he did not participate in the survey, the political calendar in the US will affect the time when interest rates will be cut.

“Data says the best time for a rate cut is September, but politics says June. But you don’t want to start discounting so close to the elections.”

*This is not investment advice.