The US Federal Reserve voted on Wednesday to leave interest rates unchanged for a fourth consecutive meeting and said it was moving toward cuts.
The central bank has a dual mandate to keep both inflation and the unemployment rate low and has been heavily focused in recent meetings on reining in inflation, eyeing its long-term target of two percent. The Federal Reserve confirmed in a statement that it was holding its benchmark lending rate steady at a 23-year high, between 5.25 percent and 5.50 percent. The institution said, "Risks to meeting the employment and inflation targets are moving towards a better balance".
But it added that the Federal Open Market Committee (FOMC), the rate-setter, was unlikely to begin cutting interest rates "until it has more confidence that inflation is moving sustainably" toward two percent. "We believe our interest rate is probably at its peak for this tightening cycle," Fed Chairman Jerome Powell told reporters at a news conference after the rate decision. He added that "almost everyone" on the FOMC favors a cut in 2024, but that action immediately after the next meeting in March is unlikely. "I don't think the committee is likely to reach a level of confidence until the March meeting," he said.
Wall Street stocks fell sharply on Wednesday afternoon as traders digested the news. /BGNES
