PHOTO BY DOUBLETREESTUDIO – STOCK.ADOBE.COMFederal Reserve officials didn’t change their outlook about interest-rate cuts later this year even though the economy has seen solid growth and inflation numbers are improving.
According to The Wall Street Journal, experts are still projecting three rate cuts this year, just as they did in December. “We continue to make good progress on bringing inflation down,” Federal Reserve Chairman Jerome Powell said yesterday in a press conference.
In a statement, the Federal Reserve said it wants to “achieve maximum employment and inflation at the rate of 2% over the longer run” and that it “decided to maintain the target range for the federal funds rate at 5.25% to 5.5%”
The statement continued, “The Committee 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%.”
The committee will also continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in previous plans.
Ahead of the release of today’s projections, The WSJ said investors anticipated that the Fed would cut rates three times this year with decent odds that a first move could take place by June. The Fed meets again April 30 – May 1.
Fed officials also expect inflation, excluding volatile food and energy prices, to end the year at a slightly higher level than projected last December — 2.6% instead of 2.4%. Inflation ended at 2.8% in January, down from 4.8% a year ago. Officials are predicting that gross domestic product will expand by 2.1%.
