- by cnn
- 15 Aug 2024
The Federal Reserve raised its benchmark lending rate by a quarter point Wednesday, lifting interest rates to their highest level in 22 years.
It's the 11th rate increase since the Fed began its inflation fight in March 2022, and comes just one month after the central bank hit pause in order to assess the state of the economy after the failures of three regional banks since the spring.
Fed officials are estimating one more rate hike this year, according to their latest set of projections. Inflation's steady slowdown in recent months has been encouraging for American consumers and businesses, but officials reiterated in their post-meeting statement that "inflation remains elevated" and that the Fed "remains highly attentive to inflation risks," suggesting that another rate hike remains on the table.
In a news conference following the decision, Fed Chair Jerome Powell underscored that another rate hike remains an option - if the economy were to pick up strength and keep upward pressure on prices.
"At the margins, stronger growth could lead over time to higher inflation and that would require an appropriate response for monetary policy," Powell said. He also said that core inflation remains "pretty elevated."
"Data dependence remains the buzz word and, given the confusing signals of waning inflation but a tight labor market, keeping all options on the table seems to be a sensible approach," wrote Seema Shah, chief global strategist at Principal Asset Management, in an analyst note.
Stocks closed on a mixed note after Powell's speech, but the Dow notched its 13th straight day of gains, its longest daily win streak since 1987. The S&P 500 closed flat and the Nasdaq Composite dipped slightly.
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