Despite a slowdown in inflation, the US Federal Reserve has indicated that it will only lower its benchmark interest rate once this year.
It was predicted back in March that by the end of 2024, the central bank would have lowered borrowing costs three times.
On Wednesday, however, fresh projections from Fed policymakers indicated a solitary rate decrease.
The Fed’s decision to keep interest rates at their current 23-year high despite a slight decline in inflation gave rise to the new prognosis.
The rate of price increases, or inflation, decreased to 3.3% in the year ending in May. This is in contrast to 3.4% in the year ending in April.
Inflation, however, remained over the Federal Reserve’s 2% objective and remained steady between April and May.
The Federal Reserve’s chair, Jerome Powell, stated that only “modest” progress had been made toward reaching the goal and that “good inflation readings” were required before interest rates could be reduced.
5.25–5.25 percent US interest rates were maintained.
Assistant professor of finance at the University of California Berkeley’s Haas Business School, Anastassia Fedyk, said on the news program: “We did get some good news in terms of better inflation numbers.”However, the Fed is still exercising caution.
