Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The US Federal Reserve held interest rates at a 23-year high on Wednesday, but gave little immediate indication of when it would begin cutting borrowing costs this year.
The Federal Open Market Committee’s decision to keep the benchmark federal funds target between 5.25 per cent and 5.5 per cent was reached unanimously, according to a statement released from the US central bank after the meeting.
Rate-setters also removed a bias towards raising rates from their statement, saying: “The committee judges the risks to achieving its employment and inflation goals are moving into better balance.”
The change in language confirms that rate-setters believe the next move in interest rates is likely to be a cut.
The decision was widely expected by the market, with more attention focused on clues on the path of interest rates when Fed chair Jay Powell holds a post-meeting press conference.
Rate-setters indicated they would need more time before deciding to lower borrowing costs, saying the FOMC “does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 per cent”.
The language signals they are unlikely to cut rates as soon as their next vote in March.
Officials expect to make 75 basis points worth of cuts over the course of 2024, as inflation shows further signs of heading towards their 2 per cent goal.
This is a developing story