Latest information on March Fed interest rate decisions

Federal Reserve Chairman Jerome Powell said continued strength in the labor market is no reason to hold off on cutting interest rates.

“Strong employment is not in itself a reason to hold off on cutting rates,” he said, adding that the job market itself is not a cause for concern about inflation. Earlier, Powell said unexpected weakness in the labor market “could also warrant a policy response.”

— Alex Harring

In response to the Fed's decision to keep interest rates on hold, Seema Shah, chief global strategist at Principal Asset Management, said, “Powell has probably shown his cards.You need a good reason not to cut rates, not a reason to cut them.'' .The market is probably.'' We couldn't ask for more from the Fed, and stocks will be happy.”

“The Fed really wants to see a soft landing. We're seeing stronger growth, lower unemployment, higher inflation, but the median remains unchanged,” Shah continued. He stressed that pre-inflation rate cuts are a “treacherous path” even though the Fed is close to its 2% target and gross domestic product growth is above trend.

— Peer Singh

David Russell, global head of market strategy at investment platform TradeStation, said Federal Reserve Chairman Jerome Powell and the middle class remain undeterred even though inflation proves to be sticky. said. He also said continued expectations for three rate cuts this year are encouraging.

“We've had a little bit of an increase in inflation this year, but Jerome Powell doesn't blink an eye,” Russell said. “Investors are relieved to see the three rate cuts remain within the dot plot, supporting markets and risk appetite.”

“The Fed may wake up with a hangover, but the punch bowl is not gone yet,” he said.

— Alex Harring

Fed Chairman Jerome Powell said the Fed has not yet decided how to change the pace of shrinking its balance sheet, but said an adjustment is not far off.

“The committee's general feeling is that it would be appropriate to slow the pace of outflows fairly soon, in line with the plans we have announced so far,” Powell said.

The shape of the balance sheet run-off plan could affect bond market supply and is being watched closely by bond traders.

— Jesse Pound

Federal Reserve Chairman Jerome Powell reiterated Wednesday that policymakers still intend to cut interest rates by the end of this year, assuming economic growth continues.

“We believe our policy rates are probably at their peak in this type of cycle, and if the economy continues broadly as expected, it would be appropriate to begin reducing policy restraint at some point this year,'' Powell said. It's very likely.”

He also reiterated his confidence in the Fed's 2% inflation target.

— Peer Singh

Sonu Varghese, global macro strategist at Carson Group, said the positive sign was that the Fed maintained its expectations for three rate cuts in 2024, even if it left unchanged at its March meeting. likely to be accepted

“The details are quite dovish as we expect a slight increase in inflation and higher economic growth but have shelved interest rate cuts,” Varghese said.

— Alex Harring

A statement has been released for the Federal Reserve's March meeting. Click here for a comparison of Wednesday's statement by CNBC and the latest meeting statement in January.

— Alex Harring

Major stock averages rose Wednesday afternoon after the U.S. Federal Reserve announced its policy decisions and interest rate outlook.

The S&P 500 rose 0.3% and the Nasdaq Composite rose 0.5%. The Dow Jones Industrial Average rose more than 140 points, or nearly 0.4%.

–Darla Mercado

As investors brace for the US Federal Reserve's decision on interest rates, the three major averages are hovering around the flatline.

As of 1:36 p.m. ET, the S&P 500 Index was down 0.06% and the Nasdaq Composite Index was down 0.08%. The Dow Jones Industrial Average fell about 6 points, or 0.02%.

Treasury yields also remained stable in the lead-up to the Fed's announcement. Two-year Treasury yields fell less than 2 basis points to 4.675%. The yield on the 10-year bond also fell by less than 2 points to 4.279%.

–Darla Mercado

While the central bank's stance and future direction on interest rates is a top priority for investors, don't forget about the Federal Reserve's balance sheet reduction.

The central bank has burnt through $7.6 trillion in Treasurys, mortgage-backed securities and other assets, and could soon shrink in size and eventually end its shrinking balance sheet. The Fed currently allows up to $60 billion in U.S. Treasuries a month to be removed from its balance sheet without being reinvested, along with up to $35 billion in mortgage-backed securities.

Investors will be waiting to hear more details about how the Fed plans to shrink its balance sheet, and Fed Chairman Jerome Powell is likely to address the issue at his press conference.

Read more from CNBC's Jeff Cox about the Fed's balance sheet here.

–Darla Mercado, Jeff Cox

It's been two years since the Federal Reserve raised interest rates for the first time in this latest cycle, and the action is having a big impact on consumers' wallets.

Since the Fed began raising interest rates in March 2022, borrowers have had to pay even more in interest. The 30-year fixed mortgage rate for the week of March 11, 2022 was 4.29%, compared to 7.09% as of March 15, 2024, according to the Department of Defense.

Carrying debt on credit card balances has also become more costly, with bank-rate annual interest rates rising from 16.34% to 20.75% since the Fed took a tough stance about two years ago.

While times are getting tougher for borrowers, savers and bond investors are benefiting from rising interest rates.

First, according to Refinitiv, the yield on two-year government bonds is currently 4.67%, but as of March 2022 it was 1.75%. The benefits of keeping cash in certificates of deposit are increasing, with the annualized yield on six-month CDs rising from 0.22% to 3.298%, according to Lending Tree.

–Darla Mercado, Nick Wells

Central bank policymakers are widely expected to leave interest rates unchanged at the end of their March policy meeting, but the dot plot will be the biggest event for traders.

The policy-setting Federal Open Market Committee is scheduled to release a dot plot of each member's predictions for future interest rates.

Investors started 2024 with an optimistic outlook for rate cuts, expecting the Fed to cut rates six to seven times by a quarter of a point. But those predictions have come true, with investors now expecting interest rates to fall for the first time in June and expecting only three rate cuts.

The change in Street forecasts comes as economic data shows it will be harder to contain inflation than most expected.

Read CNBC's Jeff Cox on what to expect from the Fed meeting.

–Darla Mercado