Active Stocks
Fri Mar 01 2024 15:59:51
  1. Tata Steel share price
  2. 150.00 6.46%
  1. State Bank Of India share price
  2. 769.30 2.67%
  1. Tata Motors share price
  2. 977.20 2.78%
  1. ITC share price
  2. 409.50 0.74%
  1. ICICI Bank share price
  2. 1,086.90 3.18%
Business News/ Economy / US Fed Meeting: FOMC keeps interest rates unchanged; here are 10 key takeaways from Federal Reserve monetary policy
BackBack

US Fed Meeting: FOMC keeps interest rates unchanged; here are 10 key takeaways from Federal Reserve monetary policy

The Fed Chair Jerome Powell-led Federal Open Market Committee (FOMC) unanimously voted to leave the Fed funds rate at a 22-year high of 5.25% to 5.5% after the two-day meeting held on September 19 and 20.

There is a “long way to go” in bringing inflation sustainably down to policymakers' two percent target, US Federal Reserve Chair Jerome Powell said in his monetary policy speech. (Image: Getty Images via AFP)Premium
There is a “long way to go” in bringing inflation sustainably down to policymakers' two percent target, US Federal Reserve Chair Jerome Powell said in his monetary policy speech. (Image: Getty Images via AFP)

The US Federal Reserve on Wednesday kept the benchmark interest rates unchanged, in line with the street estimates. The Fed Chair Jerome Powell-led Federal Open Market Committee (FOMC) unanimously voted to leave the Fed funds rate at a 22-year high of 5.25% to 5.5% after the two-day meeting held on September 19 and 20.

Here are 10 key takeaways from the US Federal Reserve’s interest-rate decision and monetary policy on Wednesday:

- FOMC votes unanimously to leave benchmark interest rates unchanged in the target range of 5.25%-5.5%, a 22-year high.

- “Dot plot" of rate projections shows policymakers still foresee one more hike this year, but 2024 and 2025 rate projections each rose by a half-percentage point, a signal the Fed expects rates to stay higher for longer.

Also Read: US Fed meeting outcome: FOMC holds rate unchanged - Read full text from policy statement

- Twelve of 19 policymakers on the FOMC expect one more rate hike this year to be appropriate; the remaining seven favor holding rates steady.

- The policymakers’ inclination to keep rates high for an extended period suggests that they remain concerned that inflation might not be falling fast enough toward their 2% target.

- The Summary Economic Projections (SEP) forecasts inflation to drop to 3.3% by year-end, and to approach the central bank's average annual 2% target.

- Policymakers’ gross domestic product (GDP) growth projection in 2023 rises to 2.1% from the 1% growth projected in June. 

Read here: US Fed Reserve Policy: FOMC doubles US GDP growth projection to 2.1% from 1% for 2023

- The unemployment rate - which is currently at 3.8% - is seen peaking at 4.1% in 2024 - and remaining there for 2025 - versus the 4.5% high-water mark seen in June.

- Statement repeats prior language saying officials are considering “the extent of additional policy firming that may be appropriate"; Fed acknowledges job gains have “slowed" but says they “remain strong"

- There is a “long way to go" in bringing inflation sustainably down to policymakers' two percent target, US Federal Reserve Chair Jerome Powell said in his monetary policy speech. He added that the US central bank is “highly attentive" to risks that high inflation poses to its mandate.

- Powell said that while some things are out of the central bank's control there is a good chance the Fed's aggressive rate hikes will not send the economy into a downturn. “I’ve always thought the soft landing was a plausible outlook."

Read US Fed Policy Meeting Key Updates here

(With inputs from Bloomberg)

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates.
More Less
Published: 21 Sep 2023, 06:38 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App