The Fed has indicated that the central bank may keep its policies strict even in the year 2024. At the same time, the Fed estimates that for the time being the inflation rate will remain at upper levels.
As expected, the Federal Reserve has decided not to make any changes in the interest rates and in the policy review announced today, it has decided to keep the rates at the previous levels. At present the rates are at the highest level in more than two decades. Along with this, the Fed has indicated that the central bank may maintain its policies strict even in the year 2024. And there may be another increase in rates this year. At the same time, the Fed estimates that for the time being the inflation rate will remain at upper levels.
What is the announcement of the Federal Reserve?
The Federal Reserve has kept rates steady, and has also indicated that another rate hike is possible this year. It is estimated that the monetary policy may remain strict next year also. The Federal Reserve estimates that by the end of the year, interest rates may remain in the range of 5.5 percent to 5.75 percent, which is 0.25 percent more than the current levels. This means that this much growth is possible by the end of the year. It is estimated that after this the rates will reach their highest level.
However, the Fed has indicated that it will take the tightening in the policy into the next year also and in such a situation, there is no hope of getting any major relief in the rates in the year 2024. According to estimates, the rates may be reduced by half a percent by the end of 2024. Earlier there was an estimate of one percent reduction.
At the same time, the Federal Reserve has said in its statement that there is concern about inflation. And inflation rates may remain at higher levels.
Market slipped after the announcement
After the announcement of the policy, there was a decline in the American markets. Dow was trading above 34750 at one time. However, with the announcement the index fell below 34600. Whereas Nasdaq reached the red mark. However, S&P showed recovery after a sharp fall.