The Federal Reserve (FED) has decided to maintain its current interest rates, but the statements issued alongside the decision hold significant importance. Despite keeping rates unchanged, the FED expressed a hawkish stance in its statements.
Key points from the FED’s statements include:
– The overnight interest rate remains steady in the range of 5.25-5.50%, with a projected single rate cut in 2024.
– Progress towards the 2% inflation target has been modest, following a previous statement of ‘lack of progress’ in May.
– The FED is not considering lowering its policy target range until it is confident that inflation is moving sustainably towards 2%.
– The economy is showing solid growth, strong employment, and low unemployment rates.
– Risks to policy objectives are now more balanced.
– Inflation has decreased from the previous year but remains elevated.
– The FED plans to continue reducing its holdings of Treasury securities and mortgage-backed securities.
Forecast-wise, 4 out of 19 FED officials do not anticipate a rate cut in 2024, while 7 predict one cut and 8 predict two cuts.
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