Fed holds rates steady, hints a rate cut could be coming
Вставка
- Опубліковано 8 вер 2024
- The Federal Reserve held interest rates steady Wednesday but hinted that it is nearer to easing monetary policy as it cited "some further" progress on inflation and Fed Chair Jerome Powell told reporters a September cut "could be on the table."
Fed officials voted to keep their benchmark interest rate in a range of 5.25%-5.50%, a 23-year high. The decision was unanimous.
The fed funds rate has been in this range since last July as part of the Fed’s aggressive campaign to tamp down inflation that ballooned during the pandemic.
But Fed officials hinted in a policy statement that they are inching closer to the confidence needed to lower rates as inflation continues to cool and the job market slows, making a cut at its next meeting on Sept. 17-18 increasingly likely.
Powell also used a press conference Wednesday afternoon to signal cuts could be getting closer.
While Powell told reporters the Fed has "made no decisions about future meetings and that includes the September meeting," he also acknowledged that "the broad sense of the committee is that the economy is moving closer to the point at which it will be appropriate to reduce our policy rate."
If central bank officials were to see inflation falling or in line with expectations, growth remaining reasonably strong and the labor market consistent with current conditions, Powell said "I think a rate cut could be on the table in September."
But he noted that if inflation proved to be stickier than anticipated, the Fed would weigh that along with other factors.
"It’s not going to be just any one thing," he added.
The hints dropped by the Fed's Federal Open Market Committee on Wednesday came in the slight changes it made to a policy statement.
When it stated that "in recent months there has been some further progress towards the Committee’s 2% inflation objective," that marked a change from the "modest further progress" cited in a prior statement.
Another sign in statement came when policymakers noted that the risks to both sides of their dual mandate - price stability and full employment - "continue to move into better balance."
That was a change from "moved toward better balance."
Officials did maintain some cautious language in their policy statement, stating that “the Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.”
They also said characterized inflation as "somewhat" elevated even as they reiterated it had eased over the past year.
For more on the Fed's monetary policy and interest rates, please visit:
finance.yahoo....
About Yahoo Finance:
Yahoo Finance provides free stock ticker data, up-to-date news, portfolio management resources, comprehensive market data, advanced tools, and more information to help you manage your financial life.
- Get the latest news and data at finance.yahoo.com
- Download the Yahoo Finance app on Apple (apple.co/3Rten0R) or Android (bit.ly/3t8UnXO)
- Follow Yahoo Finance on social:
X: / yahoofinance
Instagram: www.instagram....
TikTok: www.tiktok.com...
Facebook: / yahoofinance
LinkedIn: / yahoo-finance