Fed Meeting Live Updates: Will Interest Rate Cut for 3rd Consecutive Term? Here is What to Know.

The FOMC meeting for the US Federal Reserve is likely to slash the key interest rate by 25 basis points. The meeting started yesterday, on 17th December. Global investors await the announcement of a federal interest rate cut for 2025.  

The majority of investors claim that they expect FOMC to slash its benchmark interest rate by a quarter percentage point. It will bring the interest rate down to a range of 4.25 to 4.50. Jerome Powell, 16th Chair of Federal Reserve, signals fewer rate cuts in today’s meeting announcement. 

The FOMC meeting is currently underway and set to make an announcement today. If the Fed Reserve interest rate cuts today, it will be 100 bps below the high of July 2023. As per the inflation data, CPI (Consumer Price Index) increased by 0.3%, with a 3.3% rise in core inflation. The rise in shelter costs and producer price inflation causes the overall inflation rate to rise from 2.6% to 2.7%.  

Analyst awaits the announcement of economic projections for 2025 to make a claim on their impact on the global markets. The cut in Federal Reserve interest rate might lead to an increase in inflation, and a lack of a rate cut will also have a negative impact on the economy. 

In today’s meeting, different economic indicators will be of concern to FOMC. These include CPI, GDP growth, unemployment rate, etc. Inflation in the US remained above the Fed’s long-term target of 2%.  

US Fed Meeting: Impact on Indian Stock Market

On Tuesday, 17th December, the Indian stock market slumped amid a US Fed monetary policy decision. The BSE Sensex faced a sharp decline of 1064 points, and in Nifty 50, there was a slash of 332 points. Selling was broad-based with all sector indices. However, midcap and small-cap stocks indicated their resilience with a very small decline. 

Today, on 18th December, BSE Sensex holds a decline as it focuses on the Fed’s outlook for interest rates for 2025. The market trend remains negative, as 1,306 stocks were trading in red when the market opened. 

Indian investors await Fed commentary for a 25 basis points cut in interest rates. This is likely to bring about a significant trend in the stock market. Stay tuned for further updates as the final announcement for the Fed monetary policy decision is still pending.