December S&P 500 futures (ESZ23) are up +0.32%, and December Nasdaq 100 E-Mini futures (NQZ23) are up +0.37% this morning as the Federal Reserve’s indication of interest-rate cuts next year boosted sentiment, while investors also awaited crucial U.S. retail sales data.
As widely expected, the Federal Reserve kept its federal funds rate target range unchanged at 5.25%-5.50% for the third consecutive meeting on Wednesday. Also, the Fed’s updated Summary of Economic Projections showed a decrease in the median forecast for the federal funds rate at the end of 2024, declining from 5.125% to 4.625%, suggesting three quarter-point rate cuts next year. At the same time, Fed Chair Jerome Powell underscored that the projections do not constitute a predetermined plan, emphasizing that policymakers are not ruling out additional interest-rate increases if necessary to curb resurging inflationary pressures. Still, Powell acknowledged that officials discussed the question of when it would be appropriate to initiate interest rate cuts during this week’s meeting.
