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The US Federal Reserve (Fed) held rates steady for the second consecutive meeting, signaling the end of rate hikes. Multiple global investment banks (IBs) view November’s decision as the conclusion of the tightening cycle, with rate cuts possible in the first half of 2024.

Overseas IB: “FOMC rate hikes ‘over’… Rate cuts as early as H1 2024”

The US Federal Reserve (Fed) held rates steady for the second consecutive meeting, signaling the end of rate hikes. Multiple global investment banks (IBs) view November’s decision as the conclusion of the tightening cycle, with rate cuts possible in the first half of 2024.​

FOMC Decision Details

The Fed maintained the federal funds rate at 5.25-5.50% in its November FOMC meeting. The statement upgraded economic assessments (“solid” to “strong” growth, “slowed” to “moderated” employment) while retaining language on potential further hikes. It added “tight financial conditions” as a constraint on economic activity, reflecting recent long-term bond yield surges.​

Fed Chair Jerome Powell acknowledged tightening financial conditions in his press conference, suggesting sustained long-term rate rises could substitute for policy rate hikes.

Market Reaction & IB Analysis

Markets interpreted the statement and Powell’s dovish tone positively: Dow +0.67% to 33,274.58, S&P 500 +1.05%, Nasdaq +1.64%.​

Investment BankKey Takeaway
SocGenRate hikes ended due to lagged effects; growth slows in 2024, inflation <3% before spring cut.
JefferiesPolicy peak reached; cuts in H1 2024.
Capital EconomicsAdditional hikes unlikely despite open door, given Powell’s dovishness & data slowdown.
TD“Proceeding carefully” signals no further hikes amid growth moderation.
Goldman SachsFinancial conditions acknowledged as substitute for further tightening.
Wells FargoHawkish pause, not end; holds through Q2 2024, real policy more restrictive as inflation falls. ​

(Source: Newsis, Dec 2 article on Nov FOMC)