Published 08:32 IST, January 4th 2024
Fed officials eye inflation cooling, remain cautious on rate cut timing
Opting to keep the key interest rate steady for the third consecutive time, officials signalled an expectation for three rate cuts in 2024.
- Republic Business
- 1 min read
US Fed minutes: US Federal Reserve policymakers observed a moderation in inflationary pressures and a cooling job market, according to the minutes of Federal Reserve’s December meeting released on Wednesday.
Opting to keep the key interest rate steady for the third consecutive time, officials signalled an expectation for three rate cuts in 2024.
The minutes revealed that Fed officials, in their interest-rate forecasts, indicated a lower benchmark rate as appropriate by the end of 2024, stressing the need to stay vigilant until inflation is clearly moving sustainably toward the 2 per cent target.
While Chair Jerome Powell hinted at a news conference that the Fed might have concluded its rate hikes, the minutes highlighted uncertainty in the economic outlook, leaving the possibility of further rate increases.
The central bank initiated rate hikes in March 2022 to address unexpected consumer price surges that began nearly a year earlier.
With 11 rate increases since then, reaching a 22-year high of approximately 5.4 per cent, the Fed's anti-inflation efforts have shown progress.
Meanwhile, consumer prices rose 3.1 per cent in November from a year earlier, down from the peak of 9.1 per cent in June 2022.
Updated 14:37 IST, January 4th 2024