US rates expected to stay on hold today but will it cut in March?

Today the Fed Funds Rate target range is almost unanimously forecast to remain between 5.25% and 5.5% for a fourth consecutive meeting. Fed funds futures currently price in a 97.4% chance of no change. There is a 48% chance that the Fed will cut by at least 25 basis points at its march meeting, according to the CME. that is down from 59.7% earlier this week. Almost everybody agree that a rate cut could have happened by the next meeting in April. It comes as Pierre-Olivier Gourinchas, IMF chief economist, told reporters that "The global economy continues to display remarkable resilience, with inflation declining steadily and growth holding up. The chance of a 'soft landing' has increased," adding, "We are very far from a global recession scenario".

(AI Video Summary)

The Federal Reserve

The Federal Reserve will keep interest rates steady for now, which means they won't be raising or lowering them. This has been the trend for the past few meetings, and the market agrees, giving it a 97.4% chance of no change. However, there is a 48% chance of a rate cut in the future, possibly at the March meeting, but most experts think it's more likely to happen in April. The goal of the Fed is to have the US economy grow steadily, with a projected GDP growth of 1.4% by 2024.

International Monetary Fund

Recently, the International Monetary Fund (IMF), which is a fancy name for an economic organization, has raised its global growth forecast. They think the global economy will grow by 3.1%, which is higher than what they previously thought. They upgraded their outlook for the United States and China. Basically, they believe that the economy is doing well and that there won't be a recession happening anytime soon.

The US dollar

Now, let's talk about the US dollar. The USD has been following a pattern known as the Elliott wave, which involves a five-wave impulse and a three-wave corrective phase. Right now, the dollar is trading around 103.26. People are buying the dollar, which has pushed its value above the average it usually trades at. Experts think it could potentially reach 103.93, but they suggest setting a limit to prevent further losses at 102.50. On the other hand, the value of the EUR/USD has been declining and is trading below its average value. Experts suggest selling the EUR/USD pair and predict a possible downside target of 107.24.