In what was an immensely important policy meeting, the Federal Reserve opted to leave interest rates unchanged at 5.25%-5.50%. All eyes were on whether or not the Central Bank would opt to cut interest rates, but have adhered to expectations and left them at the current 23-year high.
The decision marks the sixth straight meeting in which the Federal Reserve held key interest rates steady. Moreover, Fed Chair Jerome Powell previously told the market to expect three rate cuts throughout 2024. However, that proclamation appears very much in doubt following the last six weeks of decisions.
Also Read: US Economy: What Will Happen If the Federal Reserve Doesn’t Cut Rates Soon?
Federal Reserve Leaves Interest Rates at 23-Year High
The United States economy is carefully observing the action of the Federal Reserve as it continues its ongoing inflation fight. Over the last six weeks, the Central Bank has been debating when to enact interest rate cuts. Although they have already assured those cuts were coming, the timing of the has very much been in question.
Now, entering May, the Federal Reserve has opted to leave interest rates unchanged yet again. Indeed, they have not yet decided to reverse the tightening campaign that the Fed has implemented over the last two years. That decision is due to the economic data that has granted them comfort in the economy’s direction.
Also Read: Federal Reserve Leaves Interest Rates Unchanged Yet Again
Indeed, economic data has not given the Federal Reserve cause to aid the economy through rate cuts. Officials have been seeking any evidence that inflation has been curtailed in order to begin cuts. Therefore, that wait-and-see approach has led to the continued maintenance of rates highest mark in more than two decades.
As with every Fed policy decision, the focus will now be placed on Chair Powell. Specifically, investors will be eagle-eyed to observe how hawkish Powell appears when addressing the media on Wednesday afternoon.
In April, Powell noted that officials were not given the necessary confidence to take action. Moreover, he said that “it’s appropriate to allow restrictive polity further time to work and let the data and the evolving outlook guide us.” Conversely, investors are awaiting insight into whether the Fed sticks to its three interest rate cut outlook provided earlier this year.
