Interest Rates | Weekly Statement June 19

United States

As largely predicted, the U.S. Federal Reserve stopped raising interest rates on Wednesday, marking the first such pause since it began in March last year to combat runaway inflation.

Although the central bank raised its forecast for the benchmark rate to a peak rate of 5.6% at the midpoint in 2023, up from a previous forecast of 5.1% seen in March, this decision does not mean that the central bank has stopped its strategy of raising interest rates.

The Fed's decision was super positive for the market and that is why we have seen the rise that has been observed in the last few days. Unfortunately, based on inflationary data and Fed sentiment, it is expected that two more rate hikes will be made later this year.

To sum up a rather volatile week, as expected with the wave of fundamentals reported throughout the week. CPI and PPI: hinting that inflation continues to slow down. Retail Sales came out quite positive, implying that companies are having good sales.

Unemployment Claims came out higher than expected, which is negative for the USD but positive for the market. Empire State Manufacturing Index came out much more positive than expected, suggesting that business conditions in the NY manufacturing sector are good.