- March 20, 2024
- Posted by: legaleseblogger
- Category: Related News
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# Federal Reserve Holds Interest Rates Steady
The Federal Reserve decided to hold interest rates steady in its latest policy meeting on Wednesday and maintained its forecast of needing to cut rates three times in 2024.
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### Benchmarks Remain Unchanged
The central bank’s benchmark interest rate stayed within the range of 5.25%-5.50%, marking the highest level since 2001. Despite the expectations of a 0.75% reduction by the end of the year, the Fed emphasized the need for greater confidence in inflation reaching the 2% target before making any adjustments.
#### Forecast Disagreements and Market Response
While some Fed officials anticipate three rate cuts in 2024, others believe only two cuts will be necessary. The decision to stick with the initial forecast of three cuts comes after volatile inflation data led to speculation about a reduction in the number of cuts. Market reactions have been positive, with increased odds of a rate cut in June and a boost in stock market performance.
##### Fed’s Projections for 2025
The Fed’s updated projections for 2025 suggest a slight decrease in the number of expected rate cuts, with officials now anticipating three cuts next year instead of four. Inflation forecasts for this year have been revised upward to 2.6%, reflecting ongoing concerns about elevated inflation levels.
###### Economic Outlook and Policy Adjustments
Despite easing inflation rates, core consumer prices remain above the Fed’s target, prompting cautious monitoring of future developments. The Fed’s growth forecast for 2024 has been raised to 2.1%, accompanied by a lower projected unemployment rate of 4%. Discussions on balancing economic growth and policy adjustments, including a potential slowdown in the Fed’s balance sheet reduction, have been ongoing.
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