Powell dashes hopes of a March rate cut by Fed

At a media conference today following the release of the Fed's latest interest rate policy decision, Chairman Jerome Powell said:

"I don't think it's likely that the committee will reach a level of confidence by the time of the March meeting to identify March as the time to [cut interest rates]."

That announcement came as a disappointment to stock traders whose hopes for rate relief were encouraged a month ago when Mr. Powell said that cuts would likely begin sometime this year. The Fed's next 2 policy decisions are scheduled to be taken on 20 March and 1 May, and hopes had been high that cuts would begin in March.

The Fed's benchmark rate is now at its highest point in 20 years. After 11 increases beginning in March 2022, the Fed last raised rates in July 2023. More recently, improving consumer confidence - now at its highest level since December 2021 - and a declining inflation rate - Consumer Price Index was at 3.3% in December - has led to the deferral of any further increases.

On today's update, stocks fell to session lows, with the Dow losing 300 points.

Will Americans see interest-rate relief in May, and if so will it be soon enough to spark summer 2024 tourism spend? Stay tuned.