Federal Reserve maintains status quo on US interest rates following three months of underwhelming inflation data | Economic Updates
The US central bank, known as the Fed, has once again decided to maintain high interest rates at 5.25% to 5.5%.
This decision comes despite the bank signaling in January that interest rate cuts were on the horizon.
The progress in lowering rates and making borrowing more affordable has been hindered by the increase in inflation in the US.
It is now possible that US rates may only be cut once in 2024, which is less than previously anticipated.
Observers will closely monitor comments from Fed Chair, Jerome Powell, to determine the future direction of interest rates.
Recent data indicates that inflation in the US rose to 3.5% in March, up from 3.2% in February and 3.1% in January.
A similar scenario is unfolding in the UK
The central banks in the UK, US, and EU are all striving to reduce inflation to 2%.
The Bank of England will face a similar decision next week when it announces its own interest rate determination.
Although markets had anticipated a cut in May, it is now forecasted to happen in August, according to Refinitv data.
In contrast to the UK, the US interest rate is represented as a range rather than a single percentage – the Fed does not specify a particular figure. Instead, the numbers serve as a target rate for lenders.
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