US Fed Policy: No change in interest rates, indication of cut next year

The Federal Reserve decided not to make any changes in the main interest rate. This is the third consecutive time that the interest rate has been kept stable by the Fed.

The Fed issued its statement after the meeting of its 19-member policy committee yesterday. The Fed said in its statement that inflation decreased last year but it remains high.

The Fed has kept its benchmark rate at around 5.4%. Let us tell you, this is its record level in 22 years. Due to this interest rate, the cost of auto loans and many other loans has increased a lot.

Home sales have declined due to high rates. Not only this, there has also been a decline in the expenditure on expensive goods and equipment which are often purchased on credit.

Fed policymakers have indicated they expect to cut their benchmark interest rate by three-quarters of a point next year. However, regarding the rate cut, it can be said that it will not start till the second half of 2024.

Officials think higher lending rates will be needed for much of next year. This is considered necessary to further slow down expenditure and inflation.

After inflation increased for the first time in 2021, this is the first time the Fed has formally acknowledged its progress against rising prices. The Fed has indicated that its efforts to cut interest rates may now be over.