A rate cut already at the next meeting in March is unlikely – Commerzbank

The Federal Reserve (Fed) left the target range for the fed funds unchanged at January’s meeting. A rate cut in March is not the most likely case, economists at Commerzbank say.

Fed signals rate cut, but not yet in March

As expected, the Fed has left its key interest rates unchanged. The fed funds target range thus remains at 5.25%-5.50%. However, the US central bank has changed its forward guidance and removed the reference to possible further rate hikes. 

Instead, it is opening the door to rate cuts, even if it first wants to gain more certainty that inflation has really been beaten. That said, a rate cut already at the next meeting in March is unlikely.