Fed Keeps Interest Rates the Same

The Federal Reserve will leave interest rates unchanged, it said Wednesday (Barron’s).

What’s going on: “In a widely expected decision, the Federal Open Market Committee maintained the current target range for the federal-funds rate at 5.25%–5.50% at the conclusion of a regular two-day meeting. Policymakers have been on hold since they last raised interest rates in July 2023.”

Policymakers previously indicated that they planned to make three cuts of a quarter of a percentage point this year, but the past three months have seen higher-than-anticipated inflation data.
The central bank’s inflation target remains at 2%.

What it means: The announcement “put a red flag on recent disappointing inflation readings and suggested a possible stall in the movement towards more balance in the economy” (Reuters, subscription).