The article Federal Reserve Keeps Steady Rates focuses on the 2024 rate cut, growth in employment, and declining inflation.

Highlights

• The Federal Reserve announced only a single interest rate cut before the end of 2024. The news was announced on Wednesday, and the interest rates remained unchanged.
• The federal committee explained the interest rates are on the higher side in the long run compared to the previous interest rates.
• The announcement of Federal Reserve Keeps Steady Rates came after we saw higher employment rates last week.
• The employment rates increased from April to May by almost 0.1%. Inflation declined in May in the US.

Federal Reserve Keeps Steady Interest Rates

The United States Federal Reserve announced on Wednesday that the single interest rate cut would occur before the year ends. The decision comes after indicators revealed rising economic growth and employment. Inflation in the US also declined in comparison to April.

However, the committee said that inflation has decreased compared to the previous year but remains on the higher side even now. However, the state is working toward progress in controlling inflation and is trying to reach the committee’s objective.

The Federal Reserve Committee plans to hit a two percent inflation rate, which is a long-term goal. On the contrary, at this point, inflation stands at 3.3%. It also aims to achieve maximum employment rate.

Interest Rates Expected to Increase in 2025

Although the Federal Reserve has kept a single interest rate cut for 2024, they fear that for the next year, it may see a total of 5 interest rate cuts. For reference, last year, there were three total rate cuts, and next year, it is expected to increase further.

The dot plot revealed the projection, which clearly shows an aggressive rate cut for 2025. However, the federal committee plans to control inflation and try to normalize the interest rate cuts.

The ideal percentage for US inflation is 2%, and the committee is trying hard to bring inflation back to normal. For the long-term indicator, the federal committee is focusing on core inflation. Again, they have also mentioned that the two percent inflation rate can be hit by 2026.

US Inflation Declines in May

Before the federal committee revealed the single interest rate cut on Wednesday, the authorities experienced inflation falling from 3.4% to 3.3% in May. 3.6% was the inflation rate recorded in May.

The decline in inflation shows a greater achievement, something that no one had expected. The Federal Reserve target is higher even at present but is lower than in the past two years. The condition is improving, but there is still a long way to go to meet the target. Hopefully, by the next two years, we will see a different scenario.

Moreover, the increase in employment has made people of the United States hopeful about new job opportunities. They are hoping for a higher employment rate, which could lower inflation and improve the country’s economy. We will see improvement in the future.

Conclusion

The single interest rate cut news has provided a sense of relief. The Federal Reserve Committee is looking to meet its target of lowering inflation and increasing the employment rate. People are looking for more information on Federal Reserve Keeps Steady Rates. The complete data is provided on several finance websites. Subscribe to the daily newsletter of Financereview.org for all trending and latest finance topics of the world.