Powell holds rates steady, signals three rate cuts in 2024

Good morning. Here's what happened overnight and what you need to know today.

1.

Sticky inflation: The US Federal Reserve has left rates unchanged for a fifth consecutive meeting. The Federal Open Market Committee (FOMC) voted unanimously to leave rates within the range of 5.25%-5.5%. The Committee also stated that it intends to make 0.75 percentage points worth of interest rate cuts during the year. The FOMC explained that while it expects to cut rates three times, it does not plan to begin cutting rates until it has greater confidence that inflation is moving sustainably toward its 2% target. The language echoes that used in the Fed’s January statement, which reinforces thinking that the Committee is in no rush to lower rates until they are certain of the inflation trajectory. According to their median rate projection, policymakers see the federal funds rate reaching 4.6% by the end of 2024. The central bank reiterated its intention to continue reducing its balance sheet by as much as USD95 billion ($145.16 billion) per month. (Capital Brief)(US Federal Reserve)(Bloomberg)

2.

Gaming pullback: China’s Tencent has announced plans to double its share buybacks this year after posting weaker than expected fourth-quarter revenue figures as its gaming revenue contracted. The company reported a 7% rise in Q4 revenue on Thursday, at 155.19 billion yuan for the three months ending 31 December 2023. Its core gaming business saw revenue in China slump 3% to 27 billion yuan, while international gaming revenue grew just 1%. Tencent also intends to at least double its share repurchases from $9.59 billion in 2023 to over $19.57 billion in 2024, as well as raising its annual dividend by 42%. A slew of tech companies including Alibaba and JD.com have announced plans to boost dividends or share repurchases after posting weaker than expected results for the December quarter. (Tencent Q4 results press release)(Reuters)