Federal Reserve Holds Off on Rate Cuts

The Federal Reserve voted to keep interest rates at a 23-year high as inflation has edged up and the labor market remains strong, likely pushing potential rate cuts even later into the year.

Interest rates will remain at a range of 5.25 percent to 5.5 percent, where they have been since last July, the Federal Open Market Committee (FOMC) announced in a statement. While the Fed signaled in December it could start cutting rates this year, a majority of traders don’t anticipate the first rate cuts to come until November, according to the CME FedWatch Tool.

The FOMC, the panel of Fed officials responsible for setting monetary policy, hiked rates from near zero percent in March 2022 to their current level to curb pandemic-induced inflation. The Fed has since extended the runway for bringing rates down as inflation remains stubbornly sticky.

Read more at The Hill