With all eyes on the outcome of the year’s inaugural meeting, the Federal Reserve has decided to keep interest rates unchanged in its first decision of 2024. Many experts predicted the agency would opt not to raise or cut interest rates to start the new year, keeping them at its current 5.25%- 5.50%. However, many are seeking insights as to when those cuts could come.
After their two-day policy meeting, the agency had opted to leave interest rates at the current 23-year high. Moreover, this decision follows the same outcome of the last three meetings for the Central Bank officials. Yet, amid positive inflation data, experts are seeking clues as to when those coveted cuts could finally manifest.
Also Read: Federal Reserve Keeps Interest Rates Unchanged
Federal Reserve Leaves Interest Rates Unchanged to Start the Year
One of the most important financial topics for the United States heading into 2024 was the state of interest rates. Since 2022, the Federal Reserve has embraced a tightening campaign to fend off rising inflation. Two years later, and many are awaiting the time for the agency to begin loosening up.
For now, the Federal Reserve has kept interest rates unchanged in what is the first Fed decision of 2024. Indeed, the Central Bank officials concluded this two-day meeting without having raised, or cut, interest rates. Although many expected this decision, the question of when those interest rate cuts could come has dominated the discussion.
Also Read: Federal Reserve Pause Interest Rate Hikes For Second Time
The Federal Reserve is still committed to its mission of bringing inflation down to its 2% annual rate target. Moreover, they have kept interest rates unchanged for the last three consecutive meetings. Considering the positive inflation data in recent months, the Fed is caught in a high-stakes balancing act.
Jacob Channel, a senior economic at LendingTree discussed the path forward for the agency. “The Fed is being very cautious as it navigates the potential for future rate cuts.” Moreover, he noted that it “doesn’t want to leave rates high forever,” but doesn’t want to make premature cuts. Such an event could “risk inflation spiking again.”
All eyes are now fixed on Federal Reserve Chair Jerome Powell. Specifically, there is the seeking out of whether or not he gives any clues regarding the immediacy of future rate cuts. Some have slated March as when those cuts could begin.