US Fed leaves interest rates unchanged for fourth time in a row

The US Federal Reserve voted Wednesday to leave interest rates unchanged for the fourth straight meeting, while indicating it was moving toward future cuts -- but probably not before May at the earliest.The central bank has raised rates 11 times since March 2022 in a bid to combat the fastest inflation in decades. Price hikes have eased substantially since then, inching closer to the Fed’s 2% target. That means the Fed is due to cut rates in 2024, which officials themselves projected last month, but the central bank’s latest policy statement released Wednesday pushed back on expectations of the first rate cut coming in March.“The Committee does not expect it will be appropriate to reduce the target range for the federal funds rate until it has gained greater confidence that inflation is moving sustainably toward 2 percent,” the statement read.
Fed Chair Jerome Powell emphasized that sentiment in his post-meeting news conference, saying that “there was no proposal to cut rates,” and that cutting in March is “probably not the most likely case.” Officials need to see “greater confidence” that inflation is on a sustainable path toward 2% before considering rate cuts, he said.Additionally, he noted: “We have not achieved a soft landing yet,” referring to a scenario in which the economy defeats inflation without triggering a recession. “Certainly, I’m encouraged — and we’re encouraged — by the progress, but we’re not declaring victory at all at this point.”