Federal Reserve Holds Steady: Interest Rates Unchanged in May 2024

As widely expected, the Federal Reserve left the central bank's key interest rate unchanged Wednesday, staying firmly in wait and see mode. The Fed's policy decision means the U.S. central bank leaves policy rate in 5.25%-5.50% range. This marks another pause as the Fed continues to evaluate economic data, particularly inflation trends, before making any further adjustments.

What This Means for You: High Borrowing Costs to Persist

The Federal Reserve will keep its key interest rate at 4.25%-4.5% amid economic uncertainty, including inflation concerns due to tariffs, as it monitors inflation. Policy easing hinges on more progress on bringing inflation down to the Fed's 2% target. Borrowing costs for consumers on everything from mortgages to auto loans and credit cards are likely to remain high throughout 2025.

Fed Signals Patience and Cautious Approach

While the economic outlook remains uncertain, Federal Reserve officials are 98% likely to leave the target range for the federal funds rate unchanged at their next policy meeting in June, pm EDT. Fed policymakers scale back to one rate cut in 2025, further indicating a cautious and measured approach to monetary policy.

Inflation Remains a Key Concern

Hace 2 días Federal Reserve officials expressed concern that they could face a challenging decision if President Donald Trump's tariffs bring a surge in inflation, according to minutes. The Federal Reserve left interest rates unchanged in May 2024, prioritizing the fight against inflation and maintaining a vigilant stance on economic data releases.