Fed set to hold rates steady, signals dovish shift
FOMC dot plot shows one quarter percentage point cut by end of 2024
Move down from three indicated following last update
The Federal Reserve left interest rates unchanged on Wednesday, as widely expected, but signaled a more dovish stance in its economic outlook.
The FOMC's median projection for the federal funds rate now shows a single quarter-point cut in 2024, down from two in March. This suggests that the Fed is becoming less confident in its ability to achieve its inflation target of 2%.
Fed Chair Jerome Powell said at a press conference following the decision that it will take "longer than expected" to become confident that inflation is on a sustainable downward path.
The Fed's decision comes as the U.S. economy faces a number of headwinds, including rising inflation, slowing growth, and geopolitical uncertainty.
Here are five key takeaways from the Fed's decision and Powell's press conference:
1. The Fed is becoming more dovish in its economic outlook. 2. The Fed is less confident in its ability to achieve its inflation target. 3. The Fed is willing to tolerate higher inflation for a longer period of time. 4. The Fed is still concerned about the risks of a recession. 5. The Fed is likely to hold rates steady for the rest of the year.
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