Fed Leaves Rates Unchanged, Citing ‘Lack of Further Progress’ on Inflation
Summary from the AllSides News Team
The Federal Reserve chose to leave interest rates unchanged on Wednesday, a widely-expected move that poured more cold water on investors’ hopes of interest rate cuts.
Key Quote: Citing “solid” economic growth, “strong” job gains, and low unemployment, a Fed statement said, “Inflation has eased over the past year but remains elevated. In recent months, there has been a lack of further progress toward the Committee's 2 percent inflation objective.” However, the Fed also warned that while economic “risks” had “moved toward better balance” in the past year, “The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks.”
For Context: While the Fed had previously signaled it would cut interest rates in 2024, persistent inflation and low unemployment have raised the incentive to keep interest rates at relative highs. Furthermore, lower-than-expected GDP growth has complicated the economic picture. Politically, public perceptions about the economy could have a significant impact on the 2024 election, and some allies of former President Donald Trump have reportedly drafted plans to limit the Fed’s independence from partisan politics.
How the Media Covered It: Coverage was common in business news outlets, which generally framed the decision as widely expected. While coverage was generally similar, CNN Business (Lean Left bias) stood out by focusing on a related Fed decision to curtail its quantitative tightening program.
Featured Coverage of this Story
From the Right
Fed holds rates steady as inflation casts doubt on future cutsThe Federal Reserve on Wednesday held interest rates steady for the sixth straight time after a string of disappointing inflation readings dimmed the odds of cuts later this year.
The widely expected decision – which left interest rates unchanged at a range of 5.25% to 5.5%, the highest level in 23 years – comes amid signs that progress on inflation is stalling, or even starting to reverse.
In their post-meeting statement, policymakers left the door open to rate cuts but stressed they need "greater confidence" inflation is coming down before easing policy....
From the Left
The Fed announced a big change today. And no, we’re not talking about interest ratesWednesday’s Federal Reserve policy decision was fairly boring for investors — officials kept interest rates the same, just as they have since July 2023.
But some savvy traders are excited about another key decision. The Fed announced that it will significantly curtail its quantitative tightening (QT) program — that’s the selling off of its assets to decrease money supply and increase interest rates — beginning in June.
US Treasury yields fell on the news. Yields on the 10-year and 2-year both dropped by .05 percentage points.
What’s happening: The Fed bought a ton of...
From the Center
Fed keeps rates steady as it notes lack of further progress on inflationThe Federal Reserve on Wednesday held its ground on interest rates, again deciding not to cut as it continues a battle with inflation that has grown more difficult lately.
In a widely expected move, the U.S. central bank kept its benchmark short-term borrowing rate in a targeted range between 5.25%-5%. The federal funds rate has been at that level since July 2023, when the Fed last hiked and took the range to its highest level in more than two decades.
The rate-setting Federal Open Market Committee did vote to ease...
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