Breaking news: The Federal Reserve is leaving interest rates unchanged for the first time since spring 2022, signaling a new chapter in the central bank’s fraught fight against inflation.
“In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments,” a Fed statement said.Fed officials release new economic forecasts every few months, and the most recent ones appear slightly more optimistic than they were in March.
However, officials are now more pessimistic on “core inflation,” a narrower measure that strips out volatile categories like food and energy, and which can be hardest to root out of the economy.Major stock indexes sunk into the red immediately after the Fed’s announcement. Just after 2 p.m., the Dow Jones Industrial Average fell 306 points, or 0.81 percent. The S&P 500 index fell 0.28 percent, and the Nasdaq 0.31 percent.
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