The Fed Decision
The Fed kept rates on hold between 5.0% and 5.25%, in-line with market expectations. As for Powell’s commentary, here are some of his key comments:
- Rate outlook: “We are prepared to maintain the current target range for longer if appropriate … If the economy evolves going forward, the appropriate level of the federal funds rate will be 4.6% at the end of this year, 3.9% at the end of 2025 and 3.1% at the end of 2026.”
- Rate outlook: “We believe that our policy rate is likely at its peak for this time in the cycle.
Overall – The Fed still seeks greater confidence inflation is moving sustainably down before making its first rate cut.
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