Fed Holds Interest Rates Steady, Forecasts 3 Cuts in 2024 – RVBusiness – Breaking RV Industry News

WASHINGTON – The Federal Reserve left its key short-term interest rate unchanged again Wednesday, hinted that rate hikes are likely over and forecast three cuts next year amid falling inflation and a cooling economy, according to a USA Today report.

That’s more rate cuts than many economists expected.

The decision leaves the Fed’s benchmark short-term rate at a 22-year high of 5.25% to 5.5% following a flurry of rate increases aimed at subduing the nation’s sharpest inflation spike in four decades. The central bank has now held its key rate steady for three straight meetings since July.

That provides another reprieve for consumers who have faced higher borrowing costs for credit cards, adjustable-rate mortgages and other loans as a result of the Fed’s moves. Yet Americans, especially seniors, are finally reaping healthy bank savings yields after years of paltry returns.

In recent weeks, with inflation slowing more emphatically and the economy and job market cooling, talk has shifted from whether the Fed would hike again to how rapidly it will trim rates next year.

The central bank didn’t rule out another rate increase as it downgraded its economic outlook for next year while lowering its inflation forecast. In a statement after a two-day meeting, it repeated that it would assess the economy and financial developments, among other factors, to determine “the extent of any additional (rate hikes) that may be appropriate to return inflation to 2% over time.”

By adding the word “any,” however, Fed officials underscored there’s a reasonable chance it won’t have to raise rates again, though it stands ready to do so if necessary.

“It’s not likely we will hike again,” Fed Chair Jerome Powell said at a news conference, noting the Fed’s key rate is “at or near its peak.”

Click here to read the full USA Today report.

Source: https://rvbusiness.com/fed-holds-interest-rates-steady-forecasts-3-cuts-in-2024/