Current:Home > MyThe Fed leaves interest rates unchanged as cooling inflation provides comfort-InfoLens
The Fed leaves interest rates unchanged as cooling inflation provides comfort
View Date:2024-12-24 00:24:27
The Federal Reserve kept interest rates unchanged Wednesday, as widely expected, after inflation eased in recent months.
Fed policymakers also signaled that rate cuts are possible next year if progress on curbing price hikes continues.
The Fed has kept its benchmark interest rate at a 22-year high between 5.25 and 5.5% since July. Higher interest rates make it more expensive to buy a car, expand a business, or carry a balance on your credit card. The high rates are intended to tamp down demand and bring prices under control.
Annual inflation fell to 3.1% in November, thanks in part to a steep drop in gasoline prices, the Labor Department said Tuesday. Overall prices are climbing less than half as fast as they were at the beginning of the year.
Hopes grow for rate cuts next year
Inflation is still above the Federal Reserve's target of 2%, however. And members of the central bank's rate-setting committee stopped short of declaring prices under control.
"The Committee remains highly attentive to inflation risks," policymakers said in a statement.
Nonetheless, there's rising optimism that the Fed could start reducing interest rates starting next year.
Forecasts released Wednesday show on average, Fed policymakers think they'll be able to lower their benchmark rate by three-quarters of a percentage point by the end of next year, and another full point in 2025.
The economy has done better than expected
So far, the economy has weathered higher interest rates in far better shape than many forecasters expected.
The unemployment rate has been under 4% for 22 months in a row. The economy added more than two-and-a-half million jobs in the first 11 months of the year.
Fed policymakers expect somewhat slower growth and higher unemployment in 2024, but their outlook is generally more positive than it was (six/three) months ago.
"This is what a soft landing looks like, and this is what full employment feels like," said Joe Brusuelas, US chief economist for RSM. "That's why we're optimistic about the direction of the economy, heading into 2024."
veryGood! (21837)
Related
- At age 44, Rich Hill's baseball odyssey continues - now with Team USA
- Binance founder Changpeng Zhao faces sentencing; US seeks 3-year term for allowing money laundering
- Tesla’s stock leaps on reports of Chinese approval for the company’s driving software
- Panthers claim Battle of Florida, oust Lightning from NHL playoffs in first round
- Pistons' Tim Hardaway Jr. leaves in wheelchair after banging head on court
- Colleges across US seek to clear protest encampments by force or ultimatum as commencements approach
- Family of Ralph Yarl files lawsuit against Andrew Lester, homeowners association after 2023 shooting
- Alo Yoga's Biggest Sale of the Year Is Here at Last! Score up to 70% off Sitewide
- Detroit-area police win appeal over liability in death of woman in custody
- 1000-lb Sisters’ Tammy Slaton Shows Off Transformation in Swimsuit Photo With Pal Haley Michelle
Ranking
- ONA Community Introduce
- Shooting after prom kills 1 and injures 3 in south Georgia town
- Shootout that killed 4 law officers began as task force tried to serve a warrant, police say
- From the sidelines, some Christians in US strive to be peacemakers as Israel-Hamas war continues
- Zendaya Shares When She Feels Extra Safe With Boyfriend Tom Holland
- The Valley: Jax Taylor Weighs in on Kristen Doute Accusing Michelle Lally of Having Affair
- How to watch John Mulaney's upcoming live Netflix series 'Everybody’s In LA'
- Remote Lake Superior island wolf numbers are stable but moose population declining, researchers say
Recommendation
-
NATO’s Rutte calls for more Western support for Ukraine, warns of Russian alliances
-
Blue Ivy joins her mom Beyoncé in Disney's new 'Lion King' prequel titled 'Mufasa'
-
Why Bhad Bhabie Is Warning Against Facial Fillers After Dissolving Them
-
Book excerpt: Judi Dench's love letter to Shakespeare
-
Tennessee suspect in dozens of rapes is convicted of producing images of child sex abuse
-
Investors trying to take control of Norfolk Southern railroad pick up key support
-
An apple a day really can help keep the doctor away. Here's how.
-
Find Out How Much Money Travis Kelce Will Make With Kansas City Chiefs After New NFL Deal