In a unanimous decision by the Federal Reserve officials on Wednesday, the central bank resolved to maintain its current interest rates, which range from 5.25% to 5.5%, according to recent developments. This move aligns with the expectations of market watchers.
Simultaneously with the announcement of steady rates, the Federal Reserve hinted at a potential rate hike before the end of this year. The proposed increase is seen as part of efforts to mitigate inflationary pressures within the economy.
Senior officials of the Federal Reserve released projections illustrating a possible future trajectory for the federal funds rate. As per these estimates, known as the "dot plot", the federal funds rate could potentially reach 5.6% by the end of 2023.
However, looking forward to 2024, these same projections suggest a potential decrease in rates. Specifically, it is predicted that two rate cuts could occur throughout 2024, which would bring the federal funds rate down to an estimated 5.1% by year-end.
The outcome of the Federal Reserve's meeting and subsequent press conference led by Fed Chair Jerome Powell has been met with disappointment by investors who were anticipating a different decision.
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