U.S. Fed Leaves Rates Unchanged, Flags 'Lack Of Further Progress' On Inflation

The US Federal Reserve held interest rates steady on May 1. The American central bank signalled it is still leaning towards eventual reductions in borrowing costs, but red flagged recent disappointing inflation readings that could make those rate cuts a while in coming. Fed Chair Jerome Powell said that after starting 2024 with three months of faster-than-expected price increases, it "will take longer than previously expected" for policymakers to become comfortable that inflation will resume the decline towards 2 percent that had cheered them through much of last year. That steady progress has stalled for now, and while Powell said rate increases remained unlikely, he set the stage for a potentially extended hold of the benchmark policy rate in the 5.25-5.50% range that has been in place since July.