The Federal Reserve’s stance follows a string of inflation reports exceeding Chair Jerome Powell and team’s 2% target|@federalreserve|X
After a two-day policy meeting, the Federal Reserve announced the interest rate will remain unchanged, citing (like earlier) persistent higher-than-anticipated inflation levels. Fed Chair Jerome Powell emphasized the need for patience before considering any rate adjustments.
Despite earlier projections for three rate cuts this year, the stance follows a string of inflation reports exceeding the JPow and team’s 2% target, raising alarms about economic stability.
Currently resting at 5.25%, the interest rates mark a high not seen in over two decades.
The Fed also announced that it will reduce the cap on Treasury securities it allows to mature.
The next Fed meeting is in June.
Why is the Fed unable to reduce rates?
Wealthy Americans and their robust spending habits are the main reasons.
While lower-income individuals struggle with surging credit card rates and auto loan delinquencies, those in middle and high-income groups are not feeling the pinch of rising prices.
Most of these people are over 60 and own houses or have cheap or no mortgages.
Their willingness to spend money on goods and services keeps prices high.