Key Insights
- Federal funds rate remains at 525 – 550 bps.
- Fed is not ready to start the rate cut cycle before it sees that inflation is sustainably moving lower.
- Powell wants to see a continuation of good inflation data before cutting rates.
On January 31, Fed released FOMC Statement. The central bank decided to leave the federal funds rate unchanged, in line with the analyst consensus. Fed noted that inflation has eased over the past year but remained elevated.
Fed noted: “The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably towards 2 persent.”
During the press conference, Powell stressed that it was important to have greater confidence that inflation was indeed moving towards the 2% target.
Fed does not…
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