As expected, the Federal Reserve on Wednesday kept its key interest rate at a 23-year high in a range between 5.25% and 5.5% as it continued its effort to reduce inflation through tighter monetary conditions.
Despite the latest Consumer Price Index report showing a drop in inflation, Fed Chairman Jerome Powell said officials need to see more convincing data before changing their policy stance. “So far this year, the data have not given us that greater confidence,” he told reporters at a press conference at the conclusion of the Fed’s two-day policy meeting. “It’s probably going to take longer to get the confidence that we need to loosen policy.”
While Fed officials are still in wait-and-see mode on inflation and interest rates, they did not rule out a rate cut at some point this year, with projections indicating that one or two rate cuts could occur before the end of 2024. Seven members of the Federal Open Market Committee projected one cut this year, eight projected two and four projected none.
The FOMC will hold four more meetings this year, in July, September, November and December, and most analysts think there is little chance of a rate cut before fall.
