Policy makers at the Federal Reserve have been hinting for months that if they see enough evidence that inflation is back on rack they might finally make cuts to its benchmark interest rates.
Apparently, they need to see more.
Fed officials said after their meeting Wednesday they are leaving the rate unchanged – again.
Members of the Federal Open Market Committee, the central bank’s rate-setting panel, said in a policy statement on Wednesday that they will hold the federal funds rate in a range of 5.25% to 5.5%. That means the rate will remain at its highest level in more than 20 years, meaning the federal funds rate will stay where it has been parked since July 2023, when the central bank last raised rates.
That was the last of 11 rate increases since May 2022.
CBS News is reporting that Wall Street analysts are “keenly watching” for signals from the central bank that rates could be cut at its Septemnber meeting. According to the network, some 9 in 10 economists have penciled in the September meeting for the Fed’s first rate cut since 2020, pointing to inflation that is easing faster than expected.
“While the moderation in U.S. data has helped fuel market optimism around Fed cuts, the number of cuts still remains a question mark, with U.S. elections adding to uncertainty,” TD Securities analysts said in a July 26 research note, according to CBS.