Fed meeting recap: Everything Powell said during Wednesday’s market-moving news conference

Federal Reserve Chair Jerome Powell will continue to seek confirmation inflation is moving closer to the central bank’s 2% target, even after a recent spate of hotter inflation readings.

“The other thing is, in the second half of the year, you had some pretty low readings, so it might be harder to make that 12 month window forward,” Powell said.

“Nonetheless, we’re looking for data that confirm the low readings that we had last year,” Powell continued. “And give us a higher degree of confidence that what we saw was really inflation moving sustainably down to 2%.”

— Sarah Min

Continued strength in the labor market wouldn’t be a reason to hold off lowering interest rates, said Federal Reserve Chair Jerome Powell.

“Strong hiring in and of itself would not be a reason to hold off on rate cuts,” he said, adding that the job market by itself is not cause for concern around inflation. Earlier, Powell said “an unexpected weakening in the labor market could also warrant a policy response.”

— Alex Harring

Major inflationary data points — the consumer price index and personal consumption expenditure — rose for both January and February. Fed Chair Jerome Powell thinks this data is just further proof of inflation’s nonlinear path downwards.

“I think they haven’t really changed the overall story, which is that of inflation moving down gradually on a sometimes bumpy road toward 2%,” he said during a press conference on Wednesday afternoon. “We’re not going to overreact to these two months of data, nor are we going to ignore them.”

— Lisa Kailai Han

In response to the Federal Reserve’s decision to hold rates steady, Principal Asset Management’s chief global strategist Seema Shah said, “Powell has perhaps shown his cards: he needs a good reason not to cut rates, rather than a reason to cut rates. Markets perhaps couldn’t have asked for more from the Fed and equities will celebrate.”

“The Fed really really wants its soft-landing ending. Stronger growth, lower unemployment, higher inflation–and yet still no change to the median dot,” Shah continued. She emphasized that cutting rates before inflation is close to the Fed’s 2% target, and while GDP growth is above trend, is a “risky path.”

— Pia Singh

Federal Reserve chair Jerome Powell and the central blank are not faltering as inflation proves to be sticky, said David Russell, global head of market strategy at investing platform TradeStation. And he said the continued expectation for three interest rate cuts this year is also promising.

“We had some inflation bumps this year but Jerome Powell’s not blinking,” Russell said. “Investors are relieved to see three cuts stay in the dot plot, supporting markets and risk appetite.”

“The Fed might wake up with a hangover, but the punchbowl isn’t going away yet,” he said.  

— Alex Harring

Fed Chair Jerome Powell said the central bank has not yet come to a decision on how to change the pace of its balance sheet reduction, but he noted that an adjustment isn’t far off.

“The general sense of the committee is that it will be appropriate to slow the pace of run-off fairly soon, consistent with the plans we’ve previously issued,” Powell said.

The shape of the balance sheet run-off plan can impact supply in the bond market and is closely watched by fixed income traders.

— Jesse Pound

Federal Reserve Board Chairman Jerome Powell reiterated on Wednesday that policymakers still intend to cut rates before the end of this year, assuming economic growth continues.

“We believe that our policy rate is likely at its peak for this type of cycle, and that if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year,” Powell said.

He also reiterated his confidence in the Fed’s target inflation rate of 2%.

— Pia Singh

The Fed keeping its expectation of three interest rate cuts in 2024 can be taken as a positive sign, even as the central bank kept levels unchanged at its March meeting, according to Sonu Varghese, global macro strategist at Carson Group

“The details are quite dovish, because they’re leaving rate cuts on the table even while projecting slightly higher inflation and more economic growth,” Varghese said.

— Alex Harring

The Federal Reserve’s statement for its March meeting is out. Click here for CNBC’s comparison of Wednesday’s statement with the one from the most recent meeting in January.

— Alex Harring

The major averages ticked higher Wednesday afternoon after the Federal Reserve issued its policy decision and rate forecast.

The S&P 500 gained 0.3%, and the Nasdaq Composite jumped 0.5%. The Dow Jones Industrial Average advanced more than 140 points, or nearly 0.4%.

–Darla Mercado

The three major averages hovered near the flatline as investors braced themselves for the Federal Reserve’s rate decision.

The S&P 500 inched downward by 0.06%, while the Nasdaq Composite ticked lower by 0.08%, as of 1:36 p.m. ET. The Dow Jones Industrial Average slipped by roughly 6 points, or 0.02%.

Treasury yields also held steady in the lead up to the Fed’s announcement. The rate on the 2-year Treasury ticked down by less than 2 basis points to 4.675%. The 10-year yield also inched down by less than 2 points to 4.279%.

–Darla Mercado

The central bank’s stance on interest rates and how it will proceed are top of mind for investors, but don’t forget about the Federal Reserve’s wind-down of its balance sheet.

The central bank has been running off its $7.6 trillion in Treasury, mortgage-backed securities and other assets – and it may soon taper and ultimately end the shrinking of its balance sheet. Right now, the Fed is allowing up to $60 billion a month in Treasurys to roll off of its balance sheet without being reinvested, along with up to $35 billion in mortgage-backed securities.

Investors will be listening for details on how the Fed will go about winding down its balance sheet, an issue Fed Chair Powell may address during his news conference.

Read more here from CNBC’s Jeff Cox about the Fed’s balance sheet.

–Darla Mercado, Jeff Cox

It’s been two years since the Federal Reserve first raised interest rates in this latest cycle, and the move has had a significant impact on consumers’ wallets.

Since the Fed began raising rates in March 2022, borrowers have had to shell out more in interest expenses. During the week of March 11, 2022, a 30-year fixed mortgage had a rate of 4.29%, compared to 7.09% as of March 15, 2024, according to MND.

Carrying debt on a credit card balance also became more costly, with the annual percentage rate rising to 20.75% from 16.34% since the Fed embarked on its tougher stance roughly two years ago, per Bankrate.

Even as times have become tougher for borrowers, savers and fixed income investors are reaping the benefits of higher rates.

For starters, the yield on the 2-year Treasury is now 4.67%, compared to 1.75% back in March 2022, according to Refinitiv. Parking cash in a certificate of deposit has also become more rewarding, with annual percentage yields on 6-month CDs rising to 3.298% from 0.22%, according to Lending Tree.

–Darla Mercado, Nick Wells

Central bank policymakers are widely expected to stand pat on interest rates at the conclusion of their March policy meeting, but the dot plot will be the main event for traders.

The policy-setting Federal Open Market Committee will issue its dot plot, a breakdown of individual members’ expectations for interest rates moving forward.

Investors kicked off 2024 with a sanguine outlook on interest rate cuts, anticipating that the Fed would lower rates six or seven times in increments of quarter percentage points. But those expectations have come down to reality, as investors now anticipate rates first falling in June and they forecast only three cuts.

The shift in the Street’s forecast comes as economic data shows that inflation is proving to be harder to quash than many had hoped.

Read more from CNBC’s Jeff Cox on what to expect from the Fed’s meeting.

–Darla Mercado