THE FED PAUSES RATE HIKES IN JUNE: What's next for the markets??

FINALLY!! After 10 consecutive meetings that led to interest rate increases, the Federal Reserve paused interest rate hikes last week. The decision to pause was made in response to recent data showing cooling inflation. In May, the Consumer Price Index (CPI) rose 4% year-over-year, but this was down from 4.9% in April. This suggests that the FED's efforts to raise interest rates are starting to have an impact on inflation. However, inflation is still high, and the FED is not yet ready to declare victory. The median forecast of FED policymakers is that inflation will remain above the FED's target rate of 2% through 2023. The odds of a July rate hike are at about 61%, which would increase the federal funds rate from its already elevated range of 5%-5.25%. Despite the FED trying to downplay the "pause" and not get the markets excited, only 30% of economists believe the FED will actually raise rates higher. While we've seen some volatility from the potential of future rate hikes, and the odds of a July rate hike are elevated, many analysts and investors don't believe the FED will continue raising interest rates. What are we watching for? ⭐We've had two consecutive weeks of higher-than-estimated unemployment, and we'll find out again tomorrow when this week's jobless claims report is released. If the trend continues, it will be three consecutive weeks of increased unemployment claims. The Fed is all but saying they're going to continue rate hikes, but with more potential economic cracks, the Fed may be forced to stop. ⭐Lastly, keep an eye on corporate earnings. FedEx reported earnings today, and missed expectations. If demand is softening and the economy is slowing, the Fed will also have to consider these factors before their next meeting. Please like, subscribe, and share! Follow me for more tips! Adam Renken 303-521-0956 [email protected] NMLS # 1065772 | CO-MLO #100045495 www.caliberhomeloans.com/arenken