Federal Reserve Keeps Interest Rates Unchanged

Joshua Ramos

With all eyes on today’s meeting, the Federal Reserve has opted to officially keep interest rates unchanged. The agency has held its benchmark interest rate the same for a third consecutive meeting as it slightly eases what has been an aggressive tightening campaign.

The Fed has undoubtedly emphasized its continued goal to drop inflation to its 2% target. However, it did not feel compelled to turn course and opt to raise interest rates. Moreover, rumblings have begun to form that an interest rate cut could come at some point in 2024.

Also Read: Federal Reserve Pause Interest Rate Hikes For Second Time

Federal Reserve Keeps Interest Rates at 22-Year High

The United States economy has certainly been in a state of fragility for much of the last year. As inflation continued to threaten it, the Federal Reserve embarked on an interest rate increase campaign that lasted an entire year. Now, that has seemingly slowed based on today’s results.

Specifically, the Federal Reserve has opted to keep interest rates unchanged. Moreover, this decision marks the third consecutive meeting that the Fed has decided to not move forward with an interest rate hike. Yet, the agency is still motivated to fend off inflation and return it to the target range.

FED Chair Jerome Powell Suggests Two More Interest Rate Hikes This Year
Source: TIME

Also Read: Federal Reserve Says Stablecoins Need To Be Regulated

This decision continues a pause on monetary policy actions that was first started in July. However, interest rates remain at a 22-year high of 5.25 to 5.5%. Conversely, the decision is part of a delicate balancing act that the Fed is attempting to implore. Specifically, they are tasked with the need to drive off inflation, without doing further damage to the economy in increased job loss.

USA Today reports that the Fed is expected to announce two interest rate cuts in 2024, however, the FED said today it foresees three. Subsequently, they identified inflation that was down, in cooperation with the economy seemingly set to avoid a recession. Moreover, they forecast the Federal Reserve to be done with the most aggressive rate hike campaign in forty years.