The first FOMC meeting of 2024 is Tuesday and Wednesday, January 30-31. Fed policymakers are expected to hold the fed funds target rate at 5.25-5.50 percent, pausing in the current rate cycle for the fourth meeting in a row. The FOMC will not outright say that rates have peaked, but it is likely the case with signs of a slowdown in economic growth, a cooling in the labor market as it rebalances, and as inflation makes its bumpy way back toward the 2 percent inflation objective. The meeting statement at 14:00 ET on Wednesday should be quite similar to that issued on December 13. The statement will no doubt reflect the cautious approach to monetary policy and offer no hint of the timing or size of future rate cuts. Chair Jerome Powell’s press briefing at 14:30 ET on Wednesday may elaborate on the statement, but should not deviate from it.
There is no update to the summary of economic projections (SEP) at this meeting. However, the FOMC will get the January senior loan officer opinion survey to consider in its assessment of current and future financial conditions. The survey doesn’t have an official release schedule, but it should be published at 14:00 ET on Monday, February 5.
Since this is the first meeting of the year, the FOMC will perform a number of housekeeping tasks, including the rotation of voters among the district bank presidents. In addition to the full complement of the Board of Governors, voting presidents are New York’s John Williams (FOMC Vice Chair), Cleveland’s Loretta Mester (retiring in June), Atlanta’s Thomas Barkin, Richmond’s Raphael Bostic, and San Francisco’s Mary Daly.
The FOMC will not have the January employment report to consider in their deliberations. This report wont’ be released until 8:30 ET on Friday. The January establishment survey will include annual benchmark revisions; the household survey data revisions were released in the prior report. The revisions to the payroll numbers can be large, so forecasting the January change can be difficult. However, the early market consensus of payroll growth around 150,000 in January after an increase of 216,000 in December points to moderation in hiring. What may be more interesting is what happens with average hourly earnings in January. Almost half of all states had some sort of mandated increase in minimum wages. Most were under $1 per hour, but the cumulative effect may boost the pace of year-over-year gains, at least temporarily.