The US Federal Reserve has decided to maintain its benchmark interest rates unchanged at 5.25%-5.5% and indicated plans for three quarter-percentage point cuts before the end of 2024, CNBC reports.
The decision to maintain rates was unanimously approved by the Federal Open Market Committee. Fed Chair Jerome Powell stated that the cuts would come as long as the economic data aligns with expectations. The Fed’s “dot plot” showed three cuts in 2025, down from the previous projection of four, with additional reductions expected until the Fed funds rate reaches around 2.6% by 2026.
The Fed’s Summary of Economic Projections also revealed an accelerated GDP growth forecast for the year, upgraded to 2.1% from the previous estimate of 1.4% in December. Additionally, the unemployment rate forecast was adjusted slightly lower to 4%, while core inflation projections rose to 2.6%, up from the previous estimate but slightly below the most recent level of 2.8%.
