From Yahoo Finance: 2024-05-02 06:00:07

The Federal Reserve kept interest rates unchanged on Wednesday at a 23-year high between 5.25%-5.50% amidst a “lack of further progress” in inflation. Fed Chair Jerome Powell indicated that a rate hike is unlikely to be the next move, easing investor fears and causing stocks to rally initially. Powell outlined scenarios for rate cuts, mentioning potential triggers like inflation moving towards its target of 2%. The bar remains high for the Fed to consider rate changes, despite inflation being higher than anticipated so far in the year. Expectations for rate cuts in 2024 have been reduced due to Powell’s belief that policy is restrictive. Investors are hopeful for future rate reductions, despite current high rates. Powell’s prepared remarks no longer indicate rate cuts this year, signaling a bias towards rate reduction. Wells Fargo economist Jay Bryson suggests a wait and see approach from the Fed, despite recent data pushing them away from potential rate cuts.



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