Key takeaways from US Fed’s rate decision and Jerome Powell’s press conference

The US Federal Reserve held its key interest rate steady for the fifth consecutive meeting and said that it awaits more data to determine when to cut rates.

Over the past two years, the Fed has raised rates aggressively to fight the highest inflation in decades.

But US Fed Chair Jerome Powell said that the central bank is still not ready to lower borrowing costs just yet. Here are key takeaways from US Fed Chair Jerome Powell’s news conference:

The Fed kept interest rates unchanged at 5.25% to 5.5%. This was largely expected but the Fed kept the median projection for rate cuts this year unchanged. It also said that US policymakers still see three cuts this year and more committee members now anticipate fewer cuts than that.
Jerome Powell said that officials want to see more evidence that inflation is coming down toward the central bank’s 2% target before starting to cut rates.
US Fed also forecast that inflation moved up and it now sees more upside risks to those projections than before

. Jerome Powell noted that January and February price data were higher than expected but officials thought the disinflation path would be “bumpy” and did not overreact to last year’s quick price cooling.
Fed officials also discussed slowing the pace of their balance sheet runoff at this meeting and Jerome Powell said that process will start “fairly soon.”

This would mean that the process will actually end sooner and will just ensure a smoother transition for markets.
Following the announcement stocks and treasuries rallied as traders grew increasingly confident that Fed will start lowering interest rates in June. US Futures contracts showed about a 67% chance of a move at that meeting.
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