Federal Reserve holds rates steady
Updated 3/21/2024 7:35:00 AM
Arab Finance: The Federal Reserve has kept interest rates unchanged, and signaled its intention to implement multiple cuts before the year's end, as per a Federal Open Market Committee's (FOMC) statement.
After concluding its two-day policy meeting, the FOMC announced its commitment to maintaining the benchmark overnight borrowing rate within the 5.25%-5.5% range, unchanged since July 2023.
Accompanying this decision, FOMC officials outlined plans for three quarter-percentage point cuts by the end of 2024, marking the first reductions since the outbreak of the pandemic in March 2020, CNBC reported.
The current federal funds rate stands at its highest level in over 23 years, impacting various consumer debts as it determines interbank lending rates.
Forecasts for these cuts were revealed through the Fed's "dot plot," a collection of anonymous predictions from the 19 FOMC members. However, no specific timing for these adjustments was provided.
The dot plot suggested three cuts in 2025, one less than previously projected in December.
Additionally, the committee envisions further reductions in 2026, with the fed funds rate eventually stabilizing around 2.6%, close to what policymakers consider the "neutral rate."
Fed Chair Jerome Powell mentioned that while timing specifics were not discussed, he anticipates the cuts contingent upon favorable data.
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