US Fed keeps interest rates unchanged, sees one rate cut in 2024

The Federal Reserve headquarters

The US Federal Reserve decided, during its policy meeting held on June 11-12, to fix interest rates at the 5.25-5.50% range for the fourth time since the beginning of this year, maintaining levels at a 23-year high.

The Federal Open Market Committee (FOMC) believes that the risks facing achieving employment and inflation goals are moving towards a better balance. However, the economic outlook is still uncertain, according to a statement today, June 12.

US policymakers scaled down their expectations to just one interest rate cut this year, instead of three times as previously anticipated in March.

"[FOMC] remains very alert to inflation risks," the statement read, meaning policymakers remain concerned about inflation. However, it pointed to additional modest progress toward the inflation target.

The Fed's decision to keep interest rates steady is the eighth of its kind since the start of the current tightening cycle in March 2022, during which FOMC raised borrowing costs by 525 basis points to contain inflation.

With annual inflation rate slowing to 3.3% in May, from its peak of 9.1% in 2022, markets are awaiting the press conference to be held by Fed Chairman Jerome Powell, as well as the quarterly forecasts of policymakers, to anticipate the future path of interest rates.