Federal Reserve Holds Rates Steady at 23-Year High, Signals First Cut in Four Years

Jul 31, 2024, 06:04 PM

The Federal Reserve has held interest rates steady at a range of 5.25% to 5.50%, marking the eighth consecutive meeting without a change and maintaining rates at a 23-year high. This decision comes amid signs of easing inflation and a cooling labor market. The Fed's statement highlighted that inflation remains 'somewhat elevated' but noted progress towards the 2% target. Additionally, the Fed emphasized its dual mandate, being 'attentive to the risks to both sides,' indicating a balanced focus on both inflation and employment. The market is now pricing in a 100% chance of a rate cut in September, with the Fed signaling that a reduction in borrowing costs could occur if inflation data continues to show improvement. This would be the first cut in four years, and the decision was unanimous.