Fed Interest Rates Steady

London: 1 August 2024 (TraderMade): The Federal Reserve concluded its two-day policy meeting yesterday, leaving Fed interest rates unchanged. This decision, largely anticipated by financial markets, retains the ongoing target range for the federal funds rate between 5.25% and 5.50%.

Shifting Gears?

While acknowledging the need for continued inflation control, Chair Powell acknowledged recent signs of progress in lowering inflation. He used the phrase "greater progress has been made" when discussing inflation, suggesting that future Fed rate decisions could see a more dovish approach.

Powell Signals Potential Rate Cuts on the Horizon

Chair Powell went on to say, "A reduction in our policy rate could be on the table" when the Fed meets again in September, contingent on continued positive economic data.

This shift in tone from the Fed has sent ripples through financial markets. Investors are now closely watching economic indicators, with a focus on inflation data. A sustained decline in inflation could pave the way for lowering the Federal Reserve interest rates in the coming months.