The Fed chairman gave a speech following the central bank’s interest rate decision.
With inflation remaining high for many Americans, the Fed kept interest rates on hold for the fifth straight time at its March meeting. Policymakers also said they remain committed to delivering three rate cuts this year, although plans for rate cuts may be pushed back further.
“The economic outlook is uncertain and the Committee remains very attentive to inflation risks,” policymakers said in a statement.
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| SP500 | S&P500 | 5210.37 | +31.86 | +0.62% |
| Me: DJI | Dow Jones Average | 39408.87 | +298.11 | +0.76% |
| I:Comp | Nasdaq Composite Index | 16310.31278 | +143.52 | +0.89% |
Stocks rose on the news, pushing the S&P 500 index above 5,200 for the first time on speculation that interest rate cuts remain on the table.
The widely anticipated decision would keep the federal funds rate in the 5.25-5.5% range, its highest level in 22 years. This will also keep interest rates on mortgages, loans, and credit cards at high levels.
CME’s FedWatch Toolpredicted as many as six rate cuts at the beginning of the year, but now three cuts have been confirmed, and the federal funds rate will be 4.6% by the end of the year.
Consumer inflation was higher than expected in February
Inflation has not subsided as quickly as policymakers expected. Consumer prices rose at an annual rate of 3.2% in February, beating economists’ expectations, with prices for items such as rent, beef, juices and drinks rising 5.8%, 9.2% and 27%, respectively. A separate report showed producer prices rose 1.6% on an annualized basis last month, also higher than expected.
“We don’t know if this is a challenge or something more,” Federal Reserve Chairman Jerome Powell said during a question-and-answer session after the decision, reiterating that the committee would continue to rely on data.
Consumer inflation has fallen from a peak of 9.1%, but remains above the Fed’s 2% mandate.
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Oil prices are also starting to rise, with West Texas Intermediate crude hovering above $80 a barrel, while global benchmark Brent prices are near $86 a barrel.
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| USO | American Petroleum Fund LP | 77.14 | -1.30 | -1.66% |
| BNO | UNITED STS Brent Oil FD LP Unit | 31.34 | -0.46 | -1.45% |
The average price of gasoline tracked by AAA is $3.52 per gallon, up from $3.44 a year ago.
In an exclusive interview with FOX Business last week, Treasury Secretary Janet Yellen regretted previous comments characterizing inflation as “temporary,” saying that while prices are easing, the decline has not been “smooth.” He said it was possible.
Yellen: Inflation may not be falling smoothly
FOX Business’ Megan Henney contributed to this report.
