US Federal Reserve policy: Here are 10 key updates from the FOMC meeting outcome
- Releasing the FOMC statement after its two-day meeting, the Federal Reserve said that the recent economic indicators suggest that growth of economic activity has slowed from its strong pace in the third quarter.
The US Federal Reserve on Wednesday left the key interest rates unchanged for the third time in a row citing easing inflation over the past year. The Fed Chair Jerome Powell-led Federal Open Market Committee (FOMC) now foresees three rate cuts next year.
Releasing the FOMC statement after its two-day meeting, the Federal Reserve said that the recent economic indicators suggest that growth of economic activity has slowed from its strong pace in the third quarter.
Here are 10 key updates from the Federal Reserve’s interest-rate decision:
1) The US Fed kept its benchmark borrowing rate unchanged in the range of 5.25% and 5.50%, its highest level in 22 years.
2) The policymakers signalled that they expect to make 75 basis points (bps) cuts to their benchmark interest rate in 2024.
3) The FOMC members also cut the median projection for interest rates at the end of next year to the midpoint between 4.50 and 4.75, signalling they now expect 0.75% points of interest rate cuts.
4) The Fed policymakers expect the US economy to grow by 2.6% this year, up from 2.1% in September, before slowing down to 1.4% in 2024.
5) It expects the headline inflation to slow to 2.8% in 2023, before easing to 2.4% in 2024. The Committee also signalled its strong commitment to returning inflation to its 2% objective.
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6) Jerome Powell said that the policymakers had discussed when it would be “appropriate” for the Fed to begin cutting interest rates, while refusing to rule out another hike.
7) The Fed’s decision to keep its key lending rate between 5.25 percent and 5.50 percent lets policymakers determine “the extent of any additional policy firming that may be appropriate,” the US central bank said in a statement.
8) The inclusion of the word “any,” which was absent in November’s decision, was added as “an acknowledgement that we believe that we are likely at or near the peak rate for this cycle,” Fed Chair Jerome Powell told reporters.
9) Powell noted that economic growth appears to have slowed “substantially” in the fourth quarter of 2023, but remained on track due to strong consumer demand and improving supply conditions.
10) The Fed continues to note that inflation remains elevated. However, it also acknowledged that inflation “has eased over the past year.”
(With inputs from Agencies)
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Business NewsEconomyUS Federal Reserve policy: Here are 10 key updates from the FOMC meeting outcome
First Published:14 Dec 2023, 09:10 AM IST
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