The Federal Reserve announced today that it is once again holding interest rates steady, citing a “lack of further progress” in bringing inflation down to its 2% target.
The central bank’s benchmark interest rate will remain at a 23-year high, with rate cut hopes being pushed back until later in the year.
The Federal funds rate still sits at 5.25% – 5.5%.
During his post-announcement remarks, Fed Chair Jerome Powell commented:
“Inflation is still too high. Further progress in bring it down is not assured and the path forward is uncertain. So far this year, the data have not given us that greater confidence. It is likely that gaining such greater confidence will take longer than previously expected. We are prepared to maintain the current target Federal Funds rate for as long as appropriate.”
Also Read: Former Treasury Secretary Says Fed’s Next Move Could Be a Surprise Rate Hike (VIDEO)
One positive takeaway from Powell’s remarks thus far, which has caused markets to rally, was the confirmation that rate hikes are likely done.
Twice during his remarks, the Fed chair indicated that Federal Reserve policymakers believe the current interest rate policy is already “restrictive” enough and that the prospect of further rate hikes was “unlikely.”
Markets reacted positively to the end of rate cuts confirmation, with all three major U.S. indices in the green today.
As of this writing, the S&P 500 is up +1.06% at 5,089.08, the NASDAQ Composite is up +1.57% at 15,903.79 and the Dow is up +1.29% at 38,303.58.
Video Source: CNBC Television YouTube
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