Fed decision on interest rates today: What to expect; when and where to watch

The US Federal Reserve, which is holding a two-day meeting to deliberate on the key lending rates, will announce its decision today (June 12).

The Federal Open Market Committee (FOMC) -- the monetary body of the US Fed which recommends on the rate cut action -- initiated its meeting on June 11 under the chairmanship of Jerome Powell.

Following the conclusion of the meeting, the FOMC will make an announcement on whether it has revised the benchmark interest rates or maintained status quo. The rates have remained unchanged in the range of 5.25%-5.5% -- the highest-ever -- since July 2023.

When and where to watch Fed decision on interest rates?

The FOMC will announce its decision at 2:00 pm Washington time (11:30 pm IST). This will be followed by Fed chief Powell addressing the press to provide additional details at 2:30 pm Washington time (12:00 am IST).

What to expect from Fed?

Experts largely see the Fed keeping interest rates unchanged in this round of the FOMC meeting.

According to analysts at IG, the key lending rates will remain in the bracket of 5.25%-5.5%. This means that the Fed is likely to maintain status quo for the seventh time in a row.

What remains to be watched is whether the Fed lowers its rate cut forecast for this year, analysts said. The monetary body had earlier projected three rate cuts in calendar year 2024.

The Fed is now expected to project a median of two rate cuts in 2024, JP Morgan chief US economist Michael Feroli said last week.

Around 41% of economists polled by Bloomberg said they expect two rate cuts this year, whereas another 41% said they expect one or no rate cut in 2024.

The projection is expected to be influenced by the retail inflation data for May, which will be released at 8:30 am Washington time today (5:30 pm IST).

The Fed has an inflation target of 2%, but the rate continues to remain on the upside. In April, CPI inflation cooled to 3.4% from 3.5% a month earlier.

The employment numbers released by the US Labor Department last week also discourages an immediate rate cut, experts said. The data showed non-farm jobs rose by 272,000 in May, as compared to expectations of an increase of 185,000.