Mar 20, 2024 - Economy

Rates hold steady

Fed Chair Jerome Powell speaking at a press conference.

Federal Reserve chair Jerome Powell speaks during a news conference following Federal Open Market Committee meeting today. Photo: Chip Somodevilla/Getty Images

The Fed left interest rates unchanged today for the fifth straight time, and it tweaked projections in ways that suggest less rate-cutting than previously envisioned may lie ahead, Axios' Neil Irwin and Courtenay Brown write.

Why it matters: The Fed's announcements suggest that its plans to bring rates down this year remain intact, though the questions of "when" and "how much" are uncertain.

State of play: Several inflation indicators for the first two months of 2024 have come in higher than expected, undermining the case for imminent interest rate cuts.

  • Speaking to reporters, Fed chair Jerome Powell said that data hasn't "really changed the overall story, which is that of inflation moving down gradually, on a sometimes bumpy road, toward 2%."
  • "We were saying that it's going to be a bumpy ride," Powell said. "Now here are some bumps — and the question is, 'Are these more than bumps?' And we can't know that."

Yes, but: The Fed's new projections show that some officials have adjusted expectations for just how much rate-cutting could be on the way.

  • The median official continued to anticipate three cuts this year, unchanged from last December. Yet, in December, five top Fed officials anticipated four or more rate cuts this year. Now only one official holds that view.

The bottom line: Fed officials aren't tossing out their entire outlook based on two months of inflation data, and they continue to anticipate inflation falling and rate cuts later in the year — just not to the extent they did three months ago.


This story was an excerpt from Axios Closer, a recap on the day's biggest business stories.

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