US Federal Reserve keeps key lending rate unchanged, one cut possible in 2024 - Hindustan Times
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US Federal Reserve keeps key lending rate unchanged, one cut possible in 2024

Jun 13, 2024 07:35 AM IST

US Fed meeting outcome: This comes as inflation in the United States eased in May for a second straight month.

The US Federal Reserve left its key lending rate unchanged and said that it expects to cut rates just once this year, down from the three expected in March. The Fed voted unanimously to maintain its benchmark interest rate between 5.25 and 5.50 per cent. It noted "modest" progress made toward its long-term inflation target of two percent and raised their inflation forecasts for 2024 while keeping their growth outlook unchanged.

US Fed meeting outcome: The US Federal Reserve building is seen in Washington, DC. (AP )
US Fed meeting outcome: The US Federal Reserve building is seen in Washington, DC. (AP )

What US Fed said on possible rate cuts this year?

US central bankers believe they’ll cut interest rates just once this year, two fewer than they thought in March as per the median of new economic projections published by the Federal Reserve at the end of their June 11-12 meeting.

What happened in last US Fed meeting?

In May, the rate-setting panel during its third policy-setting meeting unanimously voted to hold the policy rate at the 23-year high mark and said ‘’there has been a lack of further progress toward the Committee's two per cent inflation objective.'' The panel also said that it ‘’does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward two per cent.'' 

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This comes as inflation in the United States eased in May for a second straight month. The trend could move the US Federal Reserve closer to cutting its benchmark interest rate from its 23-year peak. 

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The government said that consumer prices excluding volatile food and energy costs rose 0.2% from April to May- down from 0.3% the previous month. This is the smallest increase since October and the mildest such rise in three years.

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