Fed Leaves Rates Unchanged, Plans Three Rate Cuts in 2024

The Federal Reserve (Fed) announced at the end of its March meeting that it will leave interest rates unchanged, but announced an upcoming cut. Thus, the cost of money in the United States remains stable at 5.25-5.50%, the highest level in 23 years.

“Recent indicators suggest that economic activity has been growing at a solid pace,” the Fed said in a statement. “Job growth remains strong, and the unemployment rate remains low. Inflation declined last year but remains high. The committee aims to achieve maximum employment and 2 percent inflation over the long term. The Committee believes that the risks to the employment and inflation targets are balanced.”

The US Central Bank Committee recognizes that the economic outlook is uncertain and that close attention still needs to be paid to inflation risks. At the same time, it envisages three cuts in the cost of money over the course of the year totaling 75 basis points, but “it would be inappropriate to cut rates until there is greater confidence that inflation is moving steadily toward 2%.”

GDP growth estimate for 2024 was also revised to 2.1% from 1.4%. Growth of 2% is expected in 2025 and 2026, while the unemployment rate is estimated at 4% in 2024, 4.1% in 2025, and 4% in 2026.