From CNBC: 2024-05-01 14:27:27

The Federal Reserve maintains steady interest rates, battling rising inflation. The central bank holds the benchmark short-term borrowing rate at 5.25%-5% since July 2023. Fed eases bond holdings reduction pace, cautious due to lack of progress in hitting 2% inflation target. Markets await Chair Powell’s press conference for clues on future rate changes.

Inflation remains high, with Fed’s main gauge showing 2.7% annual rate. Core measure, excluding food and energy, stands at 2.8%. GDP grows slower than expected at 1.6% annualized pace in Q1, raising concerns over stagflation. Labor Department’s employment cost index surges, leading to market reevaluation of rate cuts.

Fed officials urge patience, seeking confirmation that inflation will normalize. Markets adjust rate expectations, now forecasting only one cut by year-end. FOMC previously projected three cuts in quarter percentage point intervals for 2024. Atlanta Fed President Bostic anticipates just one rate cut in the fourth quarter.

Read more: Fed rate decision May 2024: Fed holds rate steady