The Fed treats itself to the luxury of time when it comes to rates
The decision to sit pat highlights the very different approaches central bankers are taking as they try to rein in inflation while maintaining economic growth.
At long last, the US Federal Reserve and traders are in agreement – there’ll be only one US interest rate cut this year.
This clarifies the confusion that prevailed at the beginning of the year, when financial markets were pricing in up to six 25 basis point interest rate cuts, while the Fed officials had pencilled in three. But it does leave the Fed at odds with other major central banks that have already started cutting interest rates for the first time since the COVID-19 pandemic.
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Karen Maley writes on banking and finance, specialising in financial services, private equity and investment banking. Karen is based in Sydney. Connect with Karen on Twitter. Email Karen at karen.maley@afr.com
