Fed holds interest rates steady, signals only 1 cut in 2024

The move was expected, but it means that rates will remain higher for longer.

The Federal Reserve left interest rates unchanged on Wednesday while indicating it plans only one cut later this year, down from the three it forecast in January.

The announcement was widely expected and reflects the stubbornness of inflation since the beginning of the year, although there was an indication earlier Wednesday that inflation improved in May, beating forecasts.

Still, prices remain higher than the Fed’s 2% annual target and so the central bank is keeping rates higher for longer, meaning continued high borrowing costs for consumers on their mortgages, auto loans and credit cards. Stocks and bonds rallied Wednesday on the better-than-expected news on inflation and in anticipation of the Fed’s announcement.

 

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