back to top
    BusinessFederal Reserve Keeps Interest Rates Unchanged While Forecasting Slower Pace of Cuts...

    Federal Reserve Keeps Interest Rates Unchanged While Forecasting Slower Pace of Cuts in 2024

    Date:

    Federal Reserve Maintains Interest Rates While Expecting Single Reduction in 2024

    The Federal Reserve committee kept interest rates unchanged at their latest monetary policy meeting, while projecting a more gradual path of rate cuts over the coming year compared to prior forecasts. The central bank acknowledged “modest further progress” towards the 2% inflation goal in its policy statement, an upgrade from the last review.

    However, members of the rate-setting panel updated their outlook to indicate rates may need to remain higher for longer to successfully bring inflation down. The projected neutral rate, which is neither stimulating nor restricting economic activity, was lifted to 2.8% from the previous estimate of 2.6%. This signals that interest rates will have to stay above longer-term trend levels to curb rising consumer prices.

    According to the new quarterly projections, a small 0.25% cut is now anticipated by end of 2024 versus the three reductions envisaged three months ago. Inflation expectations for the close of this year were also lifted slightly to 2.6%. While reductions may start later, rates are forecast to drop sharply over 2025 and 2026 by a full percentage point each year.

    The is still expected to grow modestly above trend at 2.1% in 2022 despite a soft first quarter. Unemployment is projected to hold at the current low level of 4% through the year. Recent data indicates job gains have remained strong supporting ongoing expansion.

    In sum, the Fed is taking a more gradual approach to rate adjustments in response to recent mixed signals on inflation. Steady progress is needed before significantly easing policy, as officials now believe higher rates are required to bring inflation under control over the long-run.

    Northlines
    Northlines
    The Northlines is an independent source on the Web for news, facts and figures relating to Jammu, Kashmir and Ladakh and its neighbourhood.

    Share post:

    Popular

    More like this
    Related

    Infra.Market Secures INR 185 Crore Debt Funding Boost to Fuel Growth Plans

    Leading B2B e-commerce platform Infra.Market has raised an additional...

    Indian Startups Garner $138 Million in Funding Last Week Led by Dezerv’s $32 Million Round

    Indian startups had an active funding week as they...

    Bangladesh Delegation Visits Major Indian Ports to Assess Potential for Using Their Infrastructure to Export Goods

    Bangladesh is exploring opportunities to significantly alter its export...

    Personal income tax collections surpass corporate tax as direct tax collection grows nearly 20% YOY

    Government tax collectors have seen impressive growth in direct...