The US Federal Reserve decided to keep interest rates at a 23-year high due to ongoing concerns about inflation. Despite some cooling in the Fed’s preferred inflation index from its peak in 2022, inflation remains above the target at 2.7 percent. Fed Chair Jerome Powell stated that rate cuts would not be considered until there was greater confidence that price growth was moving towards the 2 percent target, and emphasized that the Fed was prepared to keep the current interest rate for as long as necessary.
As a result of the decision, US stocks initially rallied but ended mostly down as investors processed the news. The S&P 500 saw a significant increase before closing with a slight decrease, while international markets like London’s FTSE 100 and Japan’s Nikkei 225 also experienced fluctuations in response to the Fed’s decision. Despite this, Powell expressed hope that economic reports would show inflation was decreasing more quickly in coming months.