Central bank officials shared Wednesday they expect to cut rates less than expected by the end of next year, largely unwelcome news for investors.
Topline
The Federal Reserve decided to keep interest rates the same for just the second time since beginning its current hiking cycle aimed at curbing inflation last year, but projected that rates will remain higher over the next two years than previously expected, providing some unwelcome news for investors hoping for rates to come down sooner rather than later.Key Facts
The Fed will hold rates steady at the 22-year high of 5.25% to 5.5% as widely expected, the central bank announced Wednesday afternoon following the conclusion of the two-day meeting of its policy-setting Federal Open Markets Committee.
But perhaps more crucially, the Fed’s quarterly economic forecast Wednesday revealed policymakers expect interest rates to remain higher for longer.
Fed officials expect rates to sit at a median of 5.6% by year’s end, the same as its projection of 5.6% in June’s forecast, 5.1% by the end of 2024 versus 4.6% in June and 3.9% by the end of 2025 from 3.
