Fed Leaves Rates Unchanged, Citing ‘Lack of Further Progress’ on Inflation

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.