Next Federal Reserve Meeting: When to Expect Rate Update News

The Federal Reserve’s benchmark short-term interest rate remains at a notable high of 5.25% to 5.5%, a position it has held since July 2023. This sustained pause in rate adjustments comes after an aggressive cycle of increases that began in March 2022, during which the central bank raised rates a total of 11 times.

The primary aim of these rate hikes was to combat the economy’s rapid growth and soaring inflation by making borrowing more expensive. As the economy evolved, economists had anticipated a potential rate cut by the Fed to align more closely with the trend of slowing inflation. However, predictions for a rate cut have reduced significantly, with many now forecasting either two cuts, just one, or even none, particularly after inflation surged earlier this year.

Is a rate decrease on the horizon? After the July meeting, Federal Reserve Chair Jerome Powell noted, “The economy is moving closer to the point where it will be appropriate to reduce our policy rate. That time is drawing near. That time could be in September if the data support that.”

In light of this week’s Federal Reserve meeting, it’s pertinent to look at the calendar for upcoming meetings and their implications. The next meeting is scheduled for September 17-18.

If you’re curious about the Federal Reserve’s meeting schedule for the remainder of 2024, here are the dates:

• January 30–31
• March 19–20
• April 30–May 1
• June 11–12
• July 30–31
• September 17–18
• November 6–7
• December 17–18

The Federal Reserve plays a crucial role as the nation’s central bank, overseeing monetary policy, which includes setting interest rates and managing the money supply. Its primary goals are to promote maximum employment and maintain stable prices in the U.S. economy, with a long-term inflation target set at 2%.

One of the Fed’s principal tools for controlling inflation is the federal funds rate, the rate at which banks lend to each other overnight. When the Fed raises this rate, it typically leads to higher borrowing costs for consumers and businesses, as banks usually pass on their increased costs to borrowers. Consequently, when the Fed adjusts the fed funds rate, other interest rates such as those for adjustable-rate mortgages, credit cards, and home equity lines of credit also tend to rise.

Understanding inflation itself is critical. It reflects a general increase in prices across the economy, impacting essential goods and services like fuel, housing, and food. Inflation can be driven by a variety of factors. One key contributor is when consumer demand outpaces supply, allowing sellers to increase prices without risking a drop in sales volume. Conversely, inflation might also stem from supply shortages where insufficient goods meet existing demand, leading manufacturers or retailers to raise wholesale costs, which then get passed on to consumers through elevated retail prices.

In summary, the Federal Reserve remains at a crucial juncture regarding its interest rate decisions. While inflation dynamics continue to fluctuate, future meetings are set to shape the monetary landscape significantly. As the economy evolves, stakeholders are keenly watching for indications from the Fed about potential rate adjustments and their implications for everyday consumers and businesses alike.

Source: USA TODAY