US Fed leaves rates unchanged, sees tighter policy through 2024

WASHINGTON - The US Federal Reserve held interest rates steady on Wednesday but stiffened its hawkish stance, with a further rate increase projected by the end of the year and monetary policy kept significantly tighter through 2024 than previously expected.

But from there the Fed’s updated quarterly projections show rates falling only half a percentage point in 2024 compared to the full percentage point of cuts anticipated at the meeting in June. With the federal funds rate falling to 5.1 per cent by the end of 2024 and 3.9 per cent by the end of 2025, the central bank’s main measure of inflation is projected to drop to 3.3 per cent by the end of this year, to 2.5 per cent next year and to 2.2 per cent by the end of 2025.

Fed chairman Jerome Powell will elaborate on the statement and economic outlook in a press conference at 2.30pm EDT . The unemployment rate is also seen remaining steady at around 3.8 per cent this year and rising to just 4.1 per cent by year’s end - a vote of confidence in the possibility of containing the worst breakout of inflation since the 1980s without significant job losses.

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