Federal Reserve Signals End to Rate Hikes, Foresees Cuts in 2024

Inflation Eases but Remains High as Fed Maintains Benchmark Rate at 5.4%

The Federal Reserve has kept its key interest rate unchanged for a third consecutive time, indicating it may be done raising rates after a series of increases to combat high inflation.
Federal Reserve policymakers are expecting to make three quarter-point cuts to their benchmark interest rate next year, suggesting that high borrowing rates will still be needed for much of next year to further slow spending and inflation.
The Fed's benchmark rate remains at about 5.4%, its highest level in 22 years, leading to much higher costs for mortgages, auto loans, business borrowing, and many other forms of credit.
Inflation has eased over the past year but remains elevated, according to the Fed. However, the government’s latest report on consumer prices showed that inflation in some areas, particularly healthcare, apartment rents, restaurant meals, and other services, remains persistently high.
The Fed's quarterly economic projections show that its officials envision a “soft landing” for the economy, in which inflation would continue its decline toward the central bank’s 2% target without causing a steep downturn.