May FOMC Meeting Concludes With no Changes to Interest Rates

The Federal Reserve is looking for more confidence that inflation is headed back towards its 2% target before commencing with rate cuts.

The Federal Reserve (Fed) remains entrenched in its hold-higher-for-longer stance regarding the federal funds rate, as it elected to keep the target range at 5.25%-5.50% at the April 30-May 1 Federal Open Market Committee (FOMC) meeting.

“The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward two percent,” the meeting statement read.

The Fed’s higher-for-longer stance has been reinforced by recent readings on inflation coming in above expectations.

“It is likely that gaining such greater confidence will take longer than previously expected,” said Fed Chair Jerome Powell in his post-meeting press conference. “We are prepared to maintain the current target federal funds rate for as long as appropriate.”