• Notes From the Desk: The Fed Announcement - Give & Take.

Notes From the Desk: The Fed Announcement – Give & Take June 12 2024

Notes From The Desk: The Fed Announcement – Give & Take.


As expected, the Federal Reserve (Fed) left rates unchanged, but they did adjust their projections on the timing of cuts, pushing them further into the future.

The dot-plot thickens.


  • 2024: Shifted from 3 cuts to 1 cut.
  • 2025 & 2026: From 3 cuts to 4 cuts.
  • Neutral revised higher from 2.6% to 2.75%.


The takeaways.


  • The most important takeaway is that the Fed remains on track to cut this year and is not looking to hike further.
  • Their language shifted from ‘a lack of progress’ to ‘there has been modest further progress’ on the inflation front.
  • The neutral or long-term projection has been revised twice, from 2.5% to 2.75%.  We see the potential for further upward revisions.


The market impact. 


  • After this morning’s lower-than-expected inflation numbers, US rates dropped  14-16 bps.  After the announcement, yields gave back around half of that move and are now 6-8bps above today’s lows.
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