The US Federal Reserve calls for more confidence that inflation is moving towards the 2% target.

Wednesday, April 10, 2024 - 21:27
Point Trader Group

US Federal Reserve officials expressed concern at their March meeting that inflation was not moving quickly enough, although they still expect to cut interest rates at some point this year.

At the meeting in which the Federal Open Market Committee again voted to keep short-term borrowing rates steady, policymakers expressed doubts that inflation, although falling, was not convincing enough.

The US Federal Reserve currently targets the benchmark interest rate between 5.25%-5.5%.

As such, FOMC members voted to maintain the same conclusion in a post-meeting statement that they would not cut interest rates until they "gained greater confidence" that inflation was on a steady path back to the central bank's 2% annual target.

The minutes of the Fed meeting stated: “Participants generally noted uncertainty about continued high inflation and expressed the view that recent data did not increase their confidence that inflation is moving sustainably to 2%.”

Pointing to the long debate on inflation at the meeting, officials pointed to geopolitical unrest and rising energy prices as risks to push inflation higher, pointing to the possibility that looser policy could increase price pressures.

On the other hand, the attendees discussed a more balanced labor market, improved technology, as well as China's economic weakness and the deterioration of the commercial real estate market.

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