Central Banks
Fed Signals Three Rate Cuts Are Still Likely, Despite Inflation Uptick
- Powell says Fed likely to slow asset runoff ‘fairly soon’
- Officials lift forecasts for growth, core inflation in 2024
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Federal Reserve officials maintained their outlook for three interest-rate cuts this year and moved toward slowing the pace of reducing their bond holdings, suggesting they aren’t alarmed by a recent uptick in inflation.
Officials decided unanimously to leave the benchmark federal funds rate in a range of 5.25% to 5.5%, the highest since 2001, for a fifth straight meeting. Policymakers signaled they remain on track to cut rates this year for the first time since March 2020, but they now see just three reductions in 2025, down from four forecast in December, based on the median projection.