The US central bank has maintained the interest rate at 5.5%, which is the highest level in 23 years. This was a surprise to investors, who had predicted multiple rate cuts this year. However, the Fed now estimates that there will only be one rate cut in 2024. The decision left investors disappointed, as many were anticipating more cuts by the end of the year.
Following the announcement, Wall Street saw a slight moderation in the sharp increases. Investors are now eagerly awaiting the speech by Chairman Jerome Powell regarding the future interest rate plan.
Despite positive data on inflation, which indicated stability in May, investors remained focused on when a rate cut would finally happen. The Consumer Price Index for May remained unchanged overall while the core index, excluding food and energy, rose slightly. These numbers suggest a moderation in inflation rates.
Investors are closely watching for any signs of an interest rate cut, with markets predicting a 70% chance of an interest rate cut in September and December.
The Fed’s decision will be carefully watched by investors over the coming months as they anticipate changes in interest rates.