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HomeNewsEconomy: Fed Not Ready to Cut Rates Just Yet

Economy: Fed Not Ready to Cut Rates Just Yet

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Washington, July 4 – The Federal Reserve is not yet ready to start lowering its interest rates. The central bank’s minutes from its June meeting, released Wednesday evening, showed that policymakers remain concerned about inflation and are hesitant to ease monetary policy prematurely.

Key Points:

  • Participants noted that progress in bringing inflation down to the Fed’s 2% target is slower than they had expected in December.
  • They emphasized that rate cuts would not be appropriate unless new information emerges that provides greater confidence that inflation is sustainably moving toward the desired goal.
  • Fed officials expect only one rate cut this year, down from three they had projected in March.
  • Some participants also noted that rates may need to be raised if inflation remains elevated or accelerates further.

The Fed’s decision to keep rates on hold comes as no surprise, as most economists had expected the central bank to remain on hold at its June meeting. However, the minutes suggest that the Fed is becoming increasingly concerned about the risks of easing policy too quickly.

The minutes also showed that Fed officials are divided on the outlook for inflation. Some believe that inflation will continue to ease in the coming months, while others worry that it could remain sticky or even pick up again.

The Fed’s next meeting is scheduled for July 25-26. It is possible that the central bank could provide more guidance on its plans for the rest of the year at that time.


Sources:

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