The Federal Reserve said Wednesday it will hold interest rates steady at a 22-year high for the third consecutive meeting, as US economic growth slows and investors look toward the beginning of rate cuts sometime next year. The Fed has raised rates 11 times since March 2022 to combat high inflation, which has slowed markedly after hitting a four-decade high last summer. Still, the central bank hasn’t crossed the finish line just yet. Fed officials are expecting inflation to cool next year at a slightly faster pace than previously estimated, according to their latest set of economic projections, released Wednesday.
Some economists say the final mile of the Fed’s historic inflation fight will be the most difficult. In his post-meeting news conference, Fed Chair Jerome Powell reiterated that additional rate hikes remain on the table. However, Wall Street isn’t buying that. The first rate cut could come in March, according to futures, though the odds of a May rate cut are slightly better. Stocks rallied, despite Powell floating the possibility of more rate increases, with the Dow reaching an all-time intraday high. The central bank’s post-meeting statement noted that “inflation has eased over the past year but remains elevated,” which is a change from the usual sentence simply stating that “inflation remains elevated.”
Source: CNN
