The US Federal Reserve has held rates steady, holding off on rate cuts that many anticipate this coming fall. While Fed Chairman Jerome Powell said they had made much progress on their goal of inflation of 2% and full employment, the Federal Open Market Committee was not yet prepared to cut rates.
The Committee said that the target range for the federal funds rate would stay at 5-1/4 to 5-1/2 percent.
The Committee stated that it does not expect it will be appropriate to reduce the target range until it has greater confidence that inflation is moving sustainably toward 2 percent.
The holdings of Treasury securities, agency debt, and agency mortgage‑backed securities will continue to be reduced.
Powell said they are prepared to respond quickly if unemployment rises.
As always, the Fed said it will remain data-dependent and will continue to make its decisions based on the information available to fulfill its mandate.
The vote was unanimous.
Powell stated during his Q&A session that a rate cut could take place as soon as September. If inflation remained “stickier,” they may wait longer. Powell said it was the “totality” of data. Powell said he can envision a scenario where there are zero cuts and several cuts in 2024.
