After eleven rate hikes since March of 2022, the Fed once again left their benchmark Federal Funds Rate unchanged at a range of 5.25% to 5.5%. This decision was unanimous and marks the fifth straight meeting they held rates steady. The Fed Funds Rate is the interest rate for overnight borrowing for banks and it is not the same as mortgage rates. The Fed has been aggressively hiking the Fed Funds Rate throughout this cycle to try to slow the economy and curb the runaway inflation that became rampant over the last few years.
What’s the bottom line? Despite some recent inflation readings that were hotter than expected, the Fed noted that three rate cuts are still expected this year. The Fed’s “dot plot” of member forecasts showed that 15 out of 19 members still expect cuts of between 50 and 100 basis points over the course of 2024.