Federal Reserve keeps interest rates unchanged, sees some progress on inflation
Federal Reserve officials signaled that they expect to cut their benchmark interest rate just once this year. The Federal Reserve has kept its key interest rate unchanged at 5.3%, a level it has been at since July of last year after raising it 11 times to slow borrowing and inflation. The Fed noted that the economy is growing at a solid pace and that there has been "modest further progress" towards its 2% inflation target. However, it indicated that it expects to cut its benchmark interest rate only once this year. The rate cuts would gradually lower loan costs for consumers, who have faced high rates for various types of borrowing.
Veröffentlicht : vor 10 Monaten durch Associated Press, Spectrum News Staff in Finance
Federal Reserve officials said Wednesday that inflation has fallen further toward their target in recent months but signaled that they expect to cut their benchmark interest rate just once this year.
The policymakers' forecast for one rate cut was down from a previous forecast of three, likely because inflation remains persistently elevated.
In a statement issued after its two-day meeting, the Fed said that the economy is growing at a solid pace while hiring has “remained strong.” The Fed also said that in recent months there has been “modest further progress” toward its 2% inflation target. That is a more positive assessment than after the Fed's previous meeting May 1, when the officials said there “has been a lack of further progress" on inflation.
The policymakers, as expected, kept their key rate unchanged at roughly 5.3%. The benchmark rate has remained at that level since July of last year, after the Fed raised it 11 times to try to slow borrowing and spending and cool inflation. Fed rate cuts would, over time, lighten loan costs for consumers, who have faced punishingly high rates for mortgages, auto loans, credit cards and other forms of borrowing.
The Fed's rate cut forecasts reflect separate estimates from 19 different policymakers. The Fed said that 8 of those officials projected two cuts, 7 projected one, and four said they expect no cuts at all this year.
This is a developing story. Check back later for updates.
Themen: Markets, Inflation, Federal Reserve