Fed Interest Rate Steady At 5.25%-5.50%, High Odds For September Reduction
Key Points:
- The Fed kept interest rates at 5.25%–5.50% in July 2024.
- A 2% inflation target is maintained amid rising unemployment at 4.1%.
- An 85% chance of a September rate cut is expected to ease the financial landscape.
The Fed interest rate remains at 5.25%-5.50% as of July 2024, with cuts likely soon. Despite cooling inflation and rising unemployment, the Fed aims to balance inflation control without causing a recession.
According to a Press Release, the Federal Reserve decided to maintain interest rates at 5.25%–5.50% in July 2024, marking over a year at this 23-year high. The rate cuts are likely to occur in the coming months.
Fed Interest Rate Decision Maintains 23-Year High
However, the Fed has always adhered to the goal of 2% inflation, following a wait-and-see approach with cooling inflation and dissipated job gains—conditions that make rate cuts highly likely very soon.
Going into 2024, most discussions had been focused on US interest rates. Wall Street was gearing up for the expected reprieve of the cuts after the presumed conclusion of the Federal Reserve’s year-long tightening campaign.
Mid-2024 has arrived, and so far, rate cuts have not materialized, although changes are coming. The chances of a rate cut in September, as shown by the CME FedWatch Tool, are now 85%.
Read more: El Salvador Crypto Proposal Now Pushing Forward to Support Trade With Russia
Balancing Inflation and Recession Risks
With unemployment rising to 4.1% this year, the balancing act is on because the Fed has to keep rates high enough to tap inflation without inciting a recession.
According to Watcher.Guru, the early September rate cuts will facilitate the highly desired soft landing. Christopher Waller, a member of the Federal Reserve’s Governing Board, mentioned recently that rate cuts are forthcoming and that the time for a policy rate cut is approaching.
In sum, the Federal Reserve’s decision not to tinker with interest rates should be reviewed against the background of concerns over inflationary pressures and broader economic trends as part of a continuing strategy. These expected rate cuts will alter the US financial landscape as conditions evolve further dramatically.
| DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
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Fed Interest Rate Steady At 5.25%-5.50%, High Odds For September Reduction
Key Points:
- The Fed kept interest rates at 5.25%–5.50% in July 2024.
- A 2% inflation target is maintained amid rising unemployment at 4.1%.
- An 85% chance of a September rate cut is expected to ease the financial landscape.
The Fed interest rate remains at 5.25%-5.50% as of July 2024, with cuts likely soon. Despite cooling inflation and rising unemployment, the Fed aims to balance inflation control without causing a recession.
According to a Press Release, the Federal Reserve decided to maintain interest rates at 5.25%–5.50% in July 2024, marking over a year at this 23-year high. The rate cuts are likely to occur in the coming months.
Fed Interest Rate Decision Maintains 23-Year High
However, the Fed has always adhered to the goal of 2% inflation, following a wait-and-see approach with cooling inflation and dissipated job gains—conditions that make rate cuts highly likely very soon.
Going into 2024, most discussions had been focused on US interest rates. Wall Street was gearing up for the expected reprieve of the cuts after the presumed conclusion of the Federal Reserve’s year-long tightening campaign.
Mid-2024 has arrived, and so far, rate cuts have not materialized, although changes are coming. The chances of a rate cut in September, as shown by the CME FedWatch Tool, are now 85%.
Read more: El Salvador Crypto Proposal Now Pushing Forward to Support Trade With Russia
Balancing Inflation and Recession Risks
With unemployment rising to 4.1% this year, the balancing act is on because the Fed has to keep rates high enough to tap inflation without inciting a recession.
According to Watcher.Guru, the early September rate cuts will facilitate the highly desired soft landing. Christopher Waller, a member of the Federal Reserve’s Governing Board, mentioned recently that rate cuts are forthcoming and that the time for a policy rate cut is approaching.
In sum, the Federal Reserve’s decision not to tinker with interest rates should be reviewed against the background of concerns over inflationary pressures and broader economic trends as part of a continuing strategy. These expected rate cuts will alter the US financial landscape as conditions evolve further dramatically.
| DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
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