The Federal Reserve's political decision -makers announced that they held the federal fund rate on Wednesday after the Federal Open Market Committee (FOMC) meeting. The target area remains unchanged at 4.25% to 4.5%.
The last time the FOMC cut was at the December meeting when it lowered the target area by 25 basis points or 0.25%.
The Federal Funds sentence is the loan kit that the banks calculate each other for loans. A lower interest rate returns to reduce credit costs for credit cards and personal loans. However, banks individually choose how to react to interest changes. The average credit card interest rate is currently 21%, while car lovers are around 6%for new vehicles.
At a press conference after the FOMC meeting, the chairman of the Federal Reserve, Jerome Powell, said that inflation, which was an annual price of 2.4% in March, was still above its target of 2% and that the FED followed a “waiting and lake” approach to its monetary policy adjustments.
Relatives: The core inflation has been at the lowest level in 4 years – but will the FED rates lower? Experts expect the agency to “remain modest and dependent on the data”
“There is just so much that we don't know, I think, and we are in a good position to wait and see is that thing,” said Powell at the press conference. “We don't have to be in a hurry. The economy is resilient and is pretty good.”
Chairman of the Federal Reserve Jerome Powell. Photo by Andrew Harnik/Getty Images
Industry experts are not surprised. Ed Yardeni, head of Yardeni -Research advice, told NBC News that the best thing for the Fed was to wait and check whether inflation or unemployment has more a problem in the whole.
“So far it is proof that it is probably a cost problem as a labor market problem for the time being,” Yardeni told the outlet.
Relatives: Amazon's prices rose? The company's CEO answered questions about tariffs.
Last month, President Donald Trump received a 10% tariff on all trading partners and a tariff of up to 145% in China, which could affect consumer prices.
At the press conference, Powell found that tariff policy existed “a lot of uncertainty” and explained that the FED would carefully monitor the effects of tariffs on inflation and unemployment.
The next meeting will take place on June 17th and 18th, and experts already expect the Fed to keep interest rates stable. Barclays estimates that the Fed will hold the same interest in June and will carry out the first interest rate in July, while Morgan Stanley does not expect interest reductions per USTODAY this year.
What does the decision of the Fed mean for mortgage interest?
Melissa Cohn, regional Vice President of William Raveis Mortgage, said entrepreneur in an e -mail that she should reduce the mortgage interests this week because the Fed decided to keep interest.
“The mortgage interests will fall a little this week because the bonds of the decision of the Fed to leave interest in peace,” said Cohn.
Cohn also noted that May was “a very meaningful month” because the Fed has a better idea of ​​the effects of tariffs on the economy.
“Now it goes back to data observations and of course to see where the collective bargaining ends,” said Cohn.