Next Fed Meeting Date?
Next Fed Meeting Date?
The Federal Reserve’s Next Steps: A Critical Question for Investors
As anxious investors eagerly await the next steps of the Federal Reserve, one question looms large in their minds: “When is the next Fed meeting?” The significance of this question cannot be understated, as it is tied to the uncertainty surrounding the U.S. economy’s worst inflation in 40 years and the Fed’s aggressive campaign of interest rate hikes. In this article, we will delve into the implications of the Fed’s actions, the state of the economy, and what to expect from the upcoming meeting.
Inflation and the Fed’s Dilemma
The U.S. economy experienced its peak inflation a year ago, yet the Fed has not deviated from its aggressive policy of interest rate hikes, reminiscent of the late Carter and early Reagan administrations. The central bank’s Federal Open Market Committee (FOMC) recently left interest rates unchanged, confirming market expectations. However, what has been dubbed a “super hawkish” pause has left the door wide open for further rate hikes in future meetings.
Investors and prospective home buyers are particularly wary of additional rate hikes, bearing in mind the turmoil they sparked in the banking sector. Last year, Silicon Valley Bank and Signature Bank failed, Credit Suisse was forced into UBS’s arms, and First Republic Bank had to be rescued by JPMorgan Chase. The impact of the fastest pace of rate hikes in four decades was also felt in equity markets, with the S&P 500 recording a total return of -18% in 2022.
Examining the Data and Experts’ Opinions
While inflation has cooled down and prices rose at the slowest pace in over two years in June, experts argue that this alone cannot warrant a complete halt to rate hikes. Core Consumer Price Index (CPI), which excludes food and energy prices, remains elevated despite the overall slower rate of inflation. Steve Wyett, chief investment strategist at BOK Financial, explains, “The Fed cannot say ‘job done,’ but a declining trend in core inflation alleviates some pressure on the Fed to feel like they need to do a lot more.” In other words, the risks to the economy persist, but today’s data implies that the Fed may not need to take drastic measures.
On a broader scale, gross domestic product (GDP) has decelerated in the first quarter, influenced by high inflation, rising interest rates, and turbulence in the banking sector. The growth rate dropped to 2.0% annually, down from the 2.6% in the final quarter of 2022. Despite economists’ cautious optimism, the odds of a recession occurring within the next 12 months have been assessed at 54%. A survey by the Federal Reserve Bank of Philadelphia further projects real GDP growth of only 1.3% this year, compared to the average annual rate of 2.3% in the decade preceding the pandemic.
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The Labor Market Quandary
One of the biggest challenges for the Fed lies in the strength of the labor market. Although the June jobs report indicated a slower pace of hiring, payrolls continued to expand healthily. Even more concerning for the central bank is the rise in average hourly earnings, reflecting upward wage pressure. With a robust jobs outlook, the Fed finds itself in a tricky situation.
Considering the Fed’s dual mandate of achieving maximum employment and stable prices, alongside the backdrop of financial sector stress and increasing recession probabilities, it becomes evident why investors and market participants are fixated on the question of “when is the next Fed meeting?”
The Upcoming Fed Meeting: What to Expect
For clarity, the committee responsible for setting rates is the Federal Open Market Committee (FOMC). Their meetings occur eight times a year, lasting two days, with the policy decision released at 2 pm Eastern time. Following the decision, the Fed chair conducts a press conference at 2:30 pm, garnering significant attention from market participants.
The next Fed meeting is scheduled to begin on July 25, concluding with a policy statement on July 26 at 2 pm Eastern. After a pause in June, where rates remained unchanged, the prevailing market sentiment suggests that the Fed will resume its series of rate hikes at this meeting. As of July 24, interest rate traders have assigned a 99% probability to a 25 basis points hike, bringing the target range to 5.25% to 5.50%.
However, it is essential to note that Fed Chair Jerome Powell has emphasized the importance of data dependency in the central bank’s decision-making process. The forthcoming economic data will play a significant role in determining the exact course of action.
The 2023 Fed Meetings Calendar
For investors and market participants seeking a comprehensive overview of the Fed’s meeting schedule, the table below provided by the FOMC offers useful information:
| January 31 – Feb 1 | |
| March 21 – 22 | |
| May 2 – 3 | |
| June 13 – 14 | |
| July 25 – 26 | |
| September 19 – 20 | |
| October 31 – Nov 1 | |
| December 12 – 13 |
As the next Fed meeting approaches, investors and market observers will continue to closely monitor the economic landscape, seeking indicators and insights into the central bank’s potential actions.
In conclusion, the question of “when is the next Fed meeting?” signifies the apprehension and uncertainty prevailing in today’s financial markets. With high inflation, banking sector stress, and growing recession odds, the Fed’s decisions carry paramount importance. The upcoming meeting, scheduled for late July, looms as a critical event for investors. As the data unfolds and economic indicators emerge, it remains to be seen how the Fed will navigate its path forward and the impact it will have on the economy and financial markets.
