The Fed had its monetary policy meeting this afternoon and the big news out of Washington is the Fed has decided keep interest rates where they are. Federal interest rates have remained at 2.25-2.5% since December and will stay there for the time being. It should be noted that the Fed expects inflation to finish this year below 2% which could potentially lead to the Fed cutting interest rates to preserve the economy.
According to the AP, Fed policymakers are now expecting inflation to increase by 1.5% by the end of 2019, which is down from the March projection of 1.8%. The unexpected slowing leads to a lot of uncertainty in the economy as we don’t know how businesses will react to this news. In a survey of the 17 Fed officials that participated in today’s meeting, the AP is reporting that nearly half of them still expect a rate cut at some point this year, which contradicts March when nobody was expecting a rate cut. Only time will tell, stay tuned for updates.
If you would like to learn more about interest rates, please check out our free Interest Rates and the Economy Guide.