The Federal Reserve, or the Fed, has announced that they will not be cutting interest rates until inflation falls to 2%. Jerome Powell, head of the central bank in the United States, reassured during his press conference that there would be no immediate increase in the Fed’s policy rate at future meetings. According to Powell, the next move in the policy rate is more likely to be a hold rather than an increase.
In order to cut interest rates, the Fed requires confidence that inflation is trending downwards towards their target of 2%. However, building this confidence may take longer than initially anticipated. March saw consumer prices in the US rise by 3.5% year-on-year, as reported by the Department of Labor statistics.
During their recent meeting, the Federal Reserve kept the key interest rate unchanged and fell within the range of 5.25-5.50%. This decision was unanimously agreed upon due to lack of progress towards achieving their 2% inflation target. The Fed acknowledged the uncertain economic outlook and emphasized their commitment to closely monitoring inflation risks.
