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31/07/24
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Fed Keeps Rates Unchanged, Acknowledges Progress Against Inflation
On Wednesday, the Federal Reserve kept interest rates unchanged, but acknowledged recent progress in the fight against inflation and easing in the labor market, fueling investor hopes that the central bank may start to cut rates soon.
The FOMC kept its benchmark rate in the range of between 5.25% and 5.5%.
The Fed has not changed rates over the last year as it evaluated incoming data to make policy decisions. Recent reports showed tightness in the labor market easing and progress on inflation, and indicate that the Fed’s restrictive policies were working after bumpy inflation data earlier in the year.
The most recent measure of the Fed’s preferred inflation gauge, the PCE index, showed inflation in the 12 months through June remained steady at 2.6%, and was dropping toward the central bank’s target of 2%.
On Wednesday in its July policy statement, the Fed said although inflation remains somewhat elevated, it had eased over the past year.
In an indication that the Fed was monitoring the easing in the labor market, the Fed said the committee was aware of the risks to both sides of its dual mandate.
The Fed added the Committee felt that the risks to achieving its inflation and employment goals were still moving into better balance.
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