Federal Reserve officials have announced their decision to keep the central bank’s benchmark interest rate unchanged (yet again, for 5th time), a move widely anticipated by economists given recent inflation data indicating ongoing price increases exceeding the Fed’s preferred pace. The target range for the federal funds rate will remain 5.25% to 5.5%. Nonetheless, the majority of officials foresee three rate cuts later in 2024.

During Wednesday’s press conference, Powell refrained from predicting when the Fed might initiate rate cuts. However, the bank’s economic outlook anticipates a median federal funds rate of 4.6% by the end of the year.

Experts suggested that Americans might have to wait until the Fed’s June meeting, or possibly even later, for the first rate cut since March 2020, when the pandemic prompted the central bank to slash rates to stimulate spending.

Inflation still remains high. Per Powell, the goal is to bring inflation to 2%, with no timeline provided though. The new “normal” is though 3-4% inflation, lowering consumers purchasing ability by about half.

How this impacts your wallet?

With the Fed maintaining unchanged rates, borrowing expenses will stay high. This will affect various aspects, including credit card interest rates and loans for buying cars or properties. You might want to review and adjust your property buying / selling plans based on projected cuts and rates as they are. If you are shopping around for a loan, such as an auto loan or mortgage, consider that the rates might go down later this year.

If you have or look into CDs investments, fixed income assets or high-interest savings accounts, you can still earn as much as 5%.

The next Fed meeting will be held April 30-May 1.