Fed holds rates steady as 'lack of further progress' on inflation signals higher for longer stance

Slowdown of QT programme

The Federal Reserve kept interest rates unchanged on Wednesday (1 May) as the central bank expressed concerns over a "lack of further progress" in getting US inflation back to the 2% target.

Officials at the Federal Open Market Committee unanimously opted to leave the target range for the federal funds rate at 5.25% to 5.5%, where it has stood since July last year. This followed a series of upside inflation surprises since the FOMC's last meeting in March. In a press conference, Fed chair Jay Powell declined to say whether three rate cuts — the median estimate of Fed officials in March — were still an expectation for 2024. Instead, he reiterated that it will now take more time than initially anticipated for the Fed to gain confidence that inflation is steadily declining t...