After eleven rate hikes since March 2022, the Fed once again left their benchmark Federal Funds Rate unchanged at a range of 5.25% to 5.5%. This decision was unanimous and marks the eighth straight meeting they held rates steady.
The Fed Funds Rate is the interest rate for overnight borrowing for banks and it is not the same as mortgage rates. The Fed has been aggressively hiking the Fed Funds Rate throughout this cycle to try to slow the economy and curb the runaway inflation that became rampant over the last few years.
What’s the bottom line? Cooling consumer inflation combined with signs that the economy and job market are slowing have led to growing calls for the Fed to begin cutting their benchmark Fed Funds Rate. While Fed Chair Jerome Powell did not commit to a rate cut at their next meeting on September 17-18, he said the Fed thinks that the time is “approaching and if we do get the data that we hope we get, then a reduction in our policy rate could be on the table at the September meeting.”