The Federal Reserve (FED) “will keep its rates unchanged, between 5.25 and 5.50%”, anticipates Gregory Daco, chief economist at the firm EY Parthenon. But “it’s all we know. The rest of the FED’s communication is a mystery,” the analyst added to AFP.
After raising rates to make credit more expensive and thus cool consumption and investment, which put pressure on prices, The FED thinks about how to reduce the cost of money.
(See also: Prices of the dollar and the euro would take a new path due to an important upcoming decision).
But to start this bearish cycle, those responsible for the entity need to be sure that prices are contained. The beginning of the year did not bring good newswith a rebound in inflation.
“The FED is focused on inflation” and it is that data that “will determine whether it lowers its rates in September or not,” during the meeting that will follow next Tuesday and Wednesday, highlighted Krishna Guha, economist at Evercore, investment advisory. .
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Most market agents expects a cut in November, no longer in September as expectedaccording to data collected by CME Group specialists.
Dollar will be impacted by crucial decisions in the United States
In Colombia, and the rest of the world, The value of the dollar will be influenced by the decisions that are made in the United States and that have kept the currency stable until now.
However, several analysts foresee minimal adjustments. “The debate around the calendar for a first cut of rates on the part of the FED is excessive,” estimates Daco.
In any case, next week, the market will receive the economic forecasts from the FED updated and its managers will say if they still expect to lower rates in the second half of 2024.
Daniel Vernazza, chief economist at UniCredit Bank, expects them to float the idea of “two reductions” this year, up from three they outlined in March. “But it would not be surprising” if they have “only one” in 2024, said the expert.
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