Fed Kept Interest Rates Flat Again — But Barely Budged on 2024 Rate Cut Forecasts
The Federal Reserve opted on Wednesday December 13 to hold interest rates at the same level they’ve sat since July
The Federal Reserve opted on Wednesday December 13 to hold interest rates at the same level they’ve sat since July, as the central bank’s impactful rate-hiking cycle appears all but over, though the Fed remains coy about doing a complete 180 degree turn.
The Federal Open Markets Committee voted to keep the target federal funds rate at 5.25% to 5.5%, a widely expected move, marking the third consecutive hold.
The Fed simultaneously released its quarterly longer-run projections for interest rates, and median staff forecasts were for rates to settle at 4.6% at the end of next year and 3.6% at the end of 2025; Goldman Sachs economists projected the Fed would share 2024 and 2025 rate forecasts of 4.9% and 3.6%, respectively.
The Federal Reserve was expected to leave interest rates unchanged at the end of its policy meeting yesterday. The so-called dot plot showed that few members expected further hikes, while most anticipated the central bank will need to start cutting rates next year to stimulate economic growth as inflation nears the Fed’s 2% goal.
Many economists also expected Fed officials to hold rates at current levels for much of next year. Financial markets, however, expect the Fed to cut rates as early as next spring.
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