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US Fed keeps interest rate unchanged

13 Jun, 2024 01:05 IST|Sakshi Post

Washington, June 12 (IANS) The US Federal Reserve on Wednesday kept the interest rate unchanged but hinted that there could be one cut between now and the end of the year as they continue the fight against inflation.

The Fed announcement came after a two-day meeting of its top officials.

They will meet four more times this year -- July, September, November and December.

Fed's interest rates determine interest on home and auto loans and credit cards.

Rate hikes are aimed at slowing down the economy by curbing spending, which is a tool used by Central banks around the world to battle inflation.

The Fed increased interest rate multiple times starting in early 2022 when inflation hit a four-decade high and took it up to 5.3 per cent in July where it has been kept since.

The Fed expected to announce three cuts in 2024 as inflations showed signs of coming down, but decided against it every time as inflation stayed stubbornly high.

Inflation has cooled down notably since May and the Fed predicted that inflation could be more stubborn than expected and the overall rate could bottom out at 2.6 per cent by the end of the year instead of the 2.4 per cent they had estimated earlier.

The Fed aims to bring inflation under two per cent.

"We've made pretty good progress on inflation," Fed Chairman Jerome Powell said at a news conference.

But to cut rates, he added, "we'll need to see more good data."

A report by the US Labour Department released just hours before the Fed announcement showed that the consumer price index -- a measure of goods and services -- remained unchanged from June and at 3.3 per cent over June last year.

In April the number stood at 3.4 per cent.

Disclaimer: This story has not been edited by the Sakshi Post team and is auto-generated from syndicated feed.

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