Federal Reserve Holds Key Rate Steady For Now

March 21, 2024
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I think they haven’t really changed the overall story, which is that of inflation moving down gradually on a sometimes bumpy road toward 2%.

Federal Reserve chair Jerome Powell on Wednesday discussing recent, slightly higher-than-expected inflation data and its influence on interest rates.

Why It Matters: Fed chair Powell stuck to projections made in recent months and announced the nation’s central bank will hold its key interest rate steady for the fifth consecutive meeting; this rate influences other borrowing costs, such as interest rates for credit cards and mortgage rates, and is at the highest level it’s been in more than two decades. The Fed also indicated the potential for three rate cuts before the end of the year, with the first rate cut expected this summer.

Big Picture: This month marks two years that Federal Reserve policymakers have been working to combat elevated inflation – which has decreased from its 2022 peak, however, still remains above the Fed’s 2% goal. As the Federal Reserve leaves its key interest rate at a higher level, it keeps borrowing money more expensive for consumers as the Fed works to combat elevated inflation by decreasing demand.

Read More: Fed meeting recap: Everything Powell said during Wednesday’s market-moving news conference (CNBC)

Fed Holds Rates Steady and Projects Three Cuts This Year (The New York Times)

by Emily Hooker, based in Texas

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