Federal Reserve Chairman Powell announced that interest rates will remain unchanged at a press conference held at the Federal Reserve’s William McChesney Martin Building in Washington, DC on May 1, 2024.
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The Federal Reserve on Wednesday projected just one interest rate cut in the remainder of 2024, down from the three rate cuts expected in March.
The central bank’s “final rate” for 2024, the rate at which the benchmark federal funds rate peaks, rose to 5.1%, equivalent to a target range of 5%-5.25%. This means that the Fed is expected to cut interest rates by only 25 basis points within the current target range of 5.25% to 5.5%.
The so-called “dot plot” shows how 19 FOMC members, including voters and non-voters, indicated that four officials favored no rate cuts this year, while seven members expected one rate cut. The remaining eight officials forecast two rate cuts in 2024.
Here are the Fed’s latest goals:
As early as March, the Federal Reserve expected to cut interest rates three times this year, with the federal funds rate reaching 4.6%. After Wednesday’s sober inflation report and before the Fed releases new forecasts, traders are expecting two rate cuts this year.
In 2025, the central bank expects a total of four interest rate cuts, or a full percentage point reduction in the benchmark federal funds rate.
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