HomeTop U.S. NewsFederal Reserve Project One Rate Cut in 2024

Federal Reserve Project One Rate Cut in 2024

During a meeting on Wednesday, the Federal Reserve kept its benchmark interest rate unchanged. Additionally, the U.S. central bank projected just one interest rate cut compared to the previously expected three cuts.

The Fed’s rate remained steady for almost a full year at 5.25% to 5.5%, the highest mark in the past 23 years. Prior to that, the Fed raised interest rates 11 times in attempts to cool down the surging inflation and discourage borrowing and spending. 

The Consumer Price Index report, which was released on Wednesday, showed promising numbers with the core inflation, which excludes prices of energy and food, coming at 3.4% compared to 3.6% expected. However, while the Fed sees the report as progress, it still doesn’t warrant a more relaxed policy.

“What we’ve been getting is good progress on inflation, with growth at a good level and with a strong labor market,” Fed Chair Jerome Powell told reporters. “Ultimately, we think rates will have to come down to continue to support that. But so far, they haven’t had to.”

Powell added that while the Fed officials collectively predict just one rate cut in 2024, there is still a chance for two cuts to take place by the end of the year. Economic experts also believe that two cuts are a more likely option, with the first one expected to come in September.

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