Will the U.S. Be out of Step on Rates?

by | Jun 11, 2024

Big news on the horizon: tomorrow, the Federal Reserve wraps up its meeting and we’ll finally get the scoop on what’s happening with interest rates.

There’s a lot of buzz about this, and for good reason.

Wall Street’s been on a rollercoaster, and this year started with the market expecting as many as 6 rate cuts. 

But inflation’s been stubborn, and the U.S. economy has  been showing some serious muscle, making a rate cut far more difficult for the Fed to justify.

So, what’s the big deal?

Well, for starters, the Bank of Canada and the European Central Bank have just completed their first rate cut.

If the Fed cuts rates, it’ll sync up with other central banks like the ECB, potentially smoothing out global markets and giving economies a little boost. 

But if the Fed decides to keep rates steady, or even hike them, things could get wild.

Higher US rates would attract a ton of foreign cash into our markets, driving up asset prices and making it even harder for the Fed to fight inflation.

But it’s not just about what might happen in the U.S. A rate hike here could mean trouble abroad.

Countries with lower rates might see their currencies weaken, making it tough to import goods and keep their economies humming. Europe, in particular, could feel the squeeze.

We’re in for an interesting ride, folks. Stay tuned for tomorrow’s Fed announcement Stay tuned for what’s sure to be an impactful decision!

— The Jeffry Turnmire Trading Team


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