United States Federal Reserve’s Federal Open Market Committee (FOMC) is largely expected to keep its key interest rate unchanged during its monetary policy meeting on March 19 and 20. However, rate cuts are expected in 2024 and the market will be looking for clues on the timing. The current federal funds rate target range is between 5.25% and 5.50%.

Recent comments made by several Fed officials have suggested that interest rates are unlikely to increase from their current levels, although they have not completely ruled out the possibility. Cuts could be coming soon but they are not imminent as they are data-dependent. Some officials anticipate three rate cuts in 2024, while others caution against keeping rates low for too long as it may negatively impact the economy.

FOMC’s upcoming decision comes after the publication of hotter-than-expected February Consumer Price Index (CPI) and January Producer Price Index (PPI) reports last week, which showed that inflationary pressures persist despite having declined from peak levels. The Fed’s February Beige Book, however, indicated a slight uptick in economic activity in the United States in the early months of 2024.