The Federal Reserve voted today for the fifth consecutive meeting to keep interest rates steady, but indicated it still plans to cut rates several times this year.
The Fed’s benchmark interest rate – which has a knock-on effect on mortgages and credit card loans – will remain at its current level of between 5.25 and 5.5 percent, where it has been since last July.
But in addition to the decision, policymakers had planned a three-quarter percentage point cut by the end of the year.
These would be the first cuts since the Fed began its aggressive rate hike campaign in March 2020 in an effort to curb rampant inflation.
While investors had widely expected the Fed to keep rates steady, Wall Street was braced for economic projections released Wednesday that gave some indication of how inflation reports so far this year would impact the central bank’s outlook.
Inflation rose slightly to 3.2 percent in February, compared to 3.1 percent the month before.
Rising gas prices have made inflation stubborn, with experts wondering whether it will fall to the Fed’s 2 percent target as quickly as expected.
Benchmark borrowing costs are currently at a 23-year high, which is feeding into consumer debt.
Before the announcement, the three major averages were hovering around the flat line as investors braced for the central bank’s decision.
This is a breaking news story. Updates will follow.