The US Federal Reserve (Fed) concluded its two-day meeting on July 31, 2024.The Federal Open Market Committee (FOMC) decided to keep the target range for the federal funds rate unchanged at 5.25%-5.50%. This marks a pause in the Fed’s aggressive rate-hiking cycle that began in March 2023.
The US Fed meeting refers to the Federal Open Market Committee (FOMC) meeting, which is a gathering of the Federal Reserve’s top officials to discuss and decide on the course of monetary policy in the United States.
These meetings typically occur eight times a year and are closely watched by investors, economists, and businesses worldwide due to their significant impact on financial markets and economic conditions.
US Fed meeting output and key takeaways
The US Federal Reserve (Fed) concluded its two-day meeting on July 31, 2024, with the following key takeaways:
Interest Rates Unchanged: The Fed decided to keep its key lending rate unchanged at the current range of 5.25-5.50%. This marks a pause in the Fed’s aggressive rate-hiking cycle, which began in March 2023 to combat soaring inflation.
Progress on Inflation: The Fed acknowledged the recent progress in reducing inflation and expressed confidence that it is moving closer to its 2% target. However, it also noted that inflation remains elevated and that further progress is needed.
Possible Rate Cuts: Fed Chair Jerome Powell hinted at the possibility of rate cuts in the coming months if inflation continues to move towards the target and the economic data supports such a move. This would be the first rate cut since 2020.
Job Market Moderation: The Fed also noted that job gains have moderated and that the unemployment rate has risen slightly. This suggests that the labor market is cooling down, which could help to further ease inflationary pressures.
Data Dependence: The Fed emphasized that its future decisions on interest rates will be data-dependent. It will closely monitor incoming data on inflation, employment, and economic growth before making any further adjustments to its monetary policy.
Overall, the Fed’s July meeting indicates a cautious approach as it balances the need to further curb inflation with the desire to avoid a sharp economic slowdown. The possibility of rate cuts in the coming months offers some hope for borrowers, but the Fed’s actions will ultimately depend on the evolving economic landscape.