The FED decided to keep interest rates constant. However, it was seen that the FED followed a rather hawkish attitude in the statements it published with the interest rate decision.
Here are the statements made by the FED along with the interest rate decision:
- The FED left the overnight interest rate constant in the range of 5.25-5.50% and foresees only one interest rate cut in 2024.
- Despite the 'lack of progress' mentioned in the May 1 statement, 'modest progress' was made towards the 2% inflation target.
- The Fed does not think it would be appropriate to lower its policy target range until it gains greater confidence that inflation is sustainably moving toward 2%.
- The economy continues to grow at a solid pace, employment growth is strong, and the unemployment rate remains low.
- The risks to achieving policy objectives have moved towards a better balance.
- Inflation decreased last year but remains high.
- The FED will continue to reduce its holdings of Treasury securities and mortgage-backed securities.
- According to FED forecasts, 4 out of 19 officials do not foresee a rate cut in 2024, while 7 predict 1 and 8 predict 2 cuts.
*This is not investment advice.