Policy Rate Updates: US Fed’s easing likely to be slower than expected
We see a total of 100 bps of rate cuts in the US this year. The Bangko Sentral ng Pilipinas (BSP) will likely follow suit but delay its first rate cut by a full quarter.
The first Federal Open Market Committee (FOMC) meeting yesterday, January 31, matched market expectations as the US Federal Reserve maintained the Federal Funds Target Rate (FFR) at 5.25% – 5.50%.
This was the fourth consecutive meeting that the FOMC decided to hold policy rates steady, following a string of 11 rate hikes, including four in 2023.
Following the recent slew of data that continue to indicate strong economic growth and a still-strong labor market in the US, along with Fed Chair Jerome Powell’s outright pushback on the likelihood of a rate cut in March, we now expect that the first rate reductions of the Fed will occur in the second quarter.
For more of our analysis, please download the report below.
Policy Rate Updates: US Fed policy rates unchanged
The BSP is likely to stay hawkish amid the latest pronouncements from the US Fed chair and stickier domestic prices compared to the US.Download