Fed Holds Off On Interest Rate Hikes, Cites Inflation Easing

 

"This must be bad news for Biden," cont.:

The Federal Reserve on Wednesday held its key interest rate steady for the third straight time and set the table for multiple cuts to come in 2024 and beyond.

With the inflation rate easing and the economy holding in, policymakers on the Federal Open Market Committee voted unanimously to keep the benchmark overnight borrowing rate in a targeted range between 5.25%-5.5%. 

Along with the decision to stay on hold, committee members penciled in at least three rate cuts in 2024, assuming quarter percentage point increments. That’s less than market pricing of four, but more aggressive than what officials had previously indicated. [snip]

The developments come amid a brightening picture for inflation that had spiked to a 40-year high in mid-2022. 

In their post-meeting statement, the committee added the qualifier that inflation has “eased over the past year” while maintaining its description of prices as “elevated.” Fed officials see core inflation falling to 3.2% in 2023 and 2.4% in 2024, then finally getting back to the 2% target in 2026.

Because a large minority of the American public are in the tank for Republican narratives, President Biden's job approval numbers on the economy will never be great.  But, if core inflation falls to 2.4% next year, it might be significant enough for sentient people to give him some long overdue credit.