Powell Holds Briefing Following Rate Meeting
Fed Dials Back Rate Forecasts
Signals Just One Cut in 2024
Federal Reserve Chair Jerome Powell held a news briefing following today's Federal Open Market Committee (FOMC) meeting. The FOMC unanimously decided to keep the target range for the federal funds rate at 4.25% to 4.50%, signaling a pause in its aggressive rate-hiking campaign.
In his press conference, Powell acknowledged that inflation has shown some signs of progress but emphasized that it remains elevated and far above the Fed's target of 2%. He also indicated that the Fed expects inflation to stay high for some time, suggesting that further rate hikes may be needed in the future.
However, the Fed also slightly dialed back its forecasts for future rate increases. The median estimate among policymakers now suggests only one quarter-point cut in 2024, a departure from earlier projections of two cuts. This suggests that the Fed is becoming more cautious about the potential impact of its rate hikes on economic growth.
Powell also addressed concerns about the potential impact of the upcoming election on the Fed's decision-making process. He reiterated the Fed's commitment to independence and stated that elections would not factor into its monetary policy decisions.
In addition to holding rates steady, the Fed also announced that it would slow the pace of its balance sheet runoff starting in September. This move is intended to provide more liquidity to the financial system and support economic growth.
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