The Fed said in its policy statement that it will maintain the federal funds rate in a range of 5.25% to 5.5%, marking the third consecutive pause since July, when it last raised rates. Federal Bank officials also signaled the benchmark rate could be cut by 0.75% percentage point in 2024, according to a chart that documents their projections.
“The appropriate level [of the federal funds rate] will be 4.6% at the end of 2024” if the Fed’s economic projections hold up, Fed Chair Jerome Powell said during a conference call to discuss today’s decision.
Stocks rose modestly after the Fed’s statement, with the S&P 500 gaining 0.5% immediately after the release of the projections signaling the expected path for rates next year. Rate cuts by the Fed would reduce borrowing costs across the economy, providing relief to consumers who have been slammed by higher costs for all types of loans, from mortgages to credit card debt.