Fed may hold interest rates for longer than anyone expected
WTC, New York / © Tamara Malaniy The Federal Reserve’s plans to lower interest rates this year could be put on hold due to a confluence of factors: robust US economic growth, stubbornly high oil prices, and ongoing global uncertainties. This news comes as a surprise to many who anticipated rate cuts starting in mid-2024. Earlier this year, the Fed embarked on a series of interest rate hikes to combat inflation, which reached a peak of over 7% in June 2023. These hikes were successful in bringing down inflation to a still-elevated level of around 3.5%. However, the recent economic data paints a surprisingly strong picture. The US economy continues to defy expectations, adding jobs at a healthy clip and experiencing stable consumer spending. “The labor market remains remarkably tight,” noted Federal Reserve Chair Jerome Powell during a recent congressional hearing. “The unemployment rate sits near historic lows, and wage growth shows signs of moderation, but remains elevated.” T...
