In a meeting that is massively important, the Federal Reserve has opted to leave interest rates unchanged at 5.25%–5.50% in July 2024. The US central bank has kept rates at its current 23-year high for more than a year. However, they are expected to begin cutting those rates in the coming months.
The Fed has been consistent in its position regarding those highly anticipated cuts. It has held firm to its 2% inflation target, while adopting a wait-and-see approach to that figure coming into view. With inflation cooling and job gains slowing, those cuts are likely to happen soon.
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Federal Reserve Leaves Interest Rates Unchanged as Cuts Near
Entering 2024, the US interest rates were a massive point of discussion. After the Federal Reserve ended its year-long tightening campaign, Wall Street awaited the much-needed relief of expected cuts. At the year’s halfway point, they have yet to arrive. But that could be changing.
The Federal Reserve decided to leave interest rates unchanged in July 2024. However, the expectation is that those cuts should come within the next two months. The CME FedWatch Tool reports that there is an 85% chance the Fed will cut rates in September.
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The Fed is currently stuck in a position that will require action soon. With unemployment increasing to 4.1% this year, they have discussed the vital balance between high rates to continue guiding inflation down, while not prolonging the rates as to incite a recession.
Right now, early September cuts could help bring about the soft landing that the Fed has sought. Earlier this month, Christopher Waller, a member of the Federal Reserve’s Governing Board, noted that rate cuts were coming.
“While I don’t believe we have reached our final destination, I do believe we are getting closer to the time when a cut in the policy rate is warranted,” he said. Although it may not be now, it will almost certainly be soon.