Sunday , 14 April 2024

US Fed Meeting 2024: Fed keeps interest rates steady as Powell says ‘path forward is still uncertain’

The Federal Reserve held its interest rates steady for the fourth consecutive meeting during the US Fed Meeting 2024. The decision was announced following a two-day meeting of the Federal Open Market Committee (FOMC). The benchmark interest rates were maintained at 5.25 to 5.50 percent, in line with predictions from financial experts. Since March 2022, the central bank has increased rates eleven times in an effort to combat the fastest rate of inflation in decades. However, recent data has shown a significant decrease in price increases, bringing them closer to the Fed’s target of 2% inflation. Last month, the Fed projected that rates would be cut in 2024. However, the latest policy statement released on Wednesday cast doubt on the possibility of a rate cut in March. The statement stated, “Until it has increased confidence that inflation is moving sustainably toward 2 percent, the Committee does not anticipate it will be appropriate to lower the target range for the federal funds rate.” During a press conference, Fed chief Jerome Powell stated that the Fed has likely completed all the necessary interest rate hikes in this economic tightening cycle. However, he also mentioned that there may not be immediate rate cuts in the near future. Powell said, “We believe that our policy rate is likely at its peak for this tightening cycle and that if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year.”
He added, “But the economy has surprised forecasters in many ways since the pandemic, and ongoing progress toward our 2% inflation objective is not assured. The economic outlook is uncertain, and we remain highly attentive to inflation risks. We are prepared to maintain the current target range for the federal funds rate for longer if appropriate.” The FOMC is set to meet again on March 19-20 to discuss upcoming policy decisions. Powell also made a key announcement during the meeting, stating that rent reductions are expected to come, although they have not yet appeared in the government’s inflation statistics. He mentioned that it is a matter of when and how big the reductions will be, and that it will help in the fight against inflation. The stock market reacted to the Fed’s announcement, with stocks sinking as Powell hinted at no rate cuts in the near future. The Dow dropped by 0.6%, or 211 points, while the Nasdaq Composite fell 1.8% and the S&P 500 fell 1.2%.
Overall, the US Fed Meeting 2024 maintained interest rates at their current levels, signaling a cautious approach to future rate cuts. The path forward remains uncertain, as the Fed continues to monitor inflation risks and the evolving economic outlook.

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