FOMC meeting (2024)

FAQs

What was the outcome of the FOMC meeting? ›

US Fed Meeting Outcome highlights: The US Federal Reserve announced its interest rate decision today after a two-day Federal Open Market Committee (FOMC) meeting, leaving the benchmark interest rates unchanged at 5.25 per cent - 5.50 per cent for for the sixth straight meeting, in line with Wall Street estimates.

For traders, FOMC meetings are a time of particular volatility because any change in federal fund rates can affect a range of economic variables such as short-term interest rates, foreign exchange rates, long-term interest rates, employment output and prices of goods and services.

The Federal Reserve made the decision to keep its benchmark interest rate unchanged at its most recent policy meeting, and rates haven't moved since the start of 2024 following 11 rate hikes in 2022 and 2023.

The Federal Reserve announced at its May 2024 Federal Open Market Committee (FOMC) meeting that it would maintain the overnight federal funds rate at the current range of 5.25% to 5.5%.

The Fed on Wednesday said it is keeping the federal funds rate in a range of 5.25% to 5.5%, the same level it has held since the central bank's July 2023 meeting, which is its highest level in more than 20 years.

The Federal Reserve announced Wednesday it will leave interest rates unchanged as inflation continues to prove stickier than expected. However, the move also dashes hopes that the Fed will be able to start cutting rates soon and relieve consumers from sky-high borrowing costs.

The Bottom Line

As a general rule of thumb, when the Federal Reserve cuts interest rates, it causes the stock market to go up; when the Federal Reserve raises interest rates, it causes the stock market to go down. But there is no guarantee as to how the market will react to any given interest rate change.

When the Federal Reserve increases the federal funds rate, it typically increases interest rates throughout the economy, which tends to make the dollar stronger. The higher yields attract investment capital from investors abroad seeking higher returns on bonds and interest-rate products.

When the Fed increases the federal funds rate, it typically pushes interest rates higher overall, which makes it more expensive for businesses and individuals to borrow. The higher rates also promote saving.

Analysts with Fannie Mae and the Mortgage Bankers Association (MBA) both project that rates will fall going into 2024 and throughout next year. Fannie Mae economists expect rates to drop more quickly, falling below 6% by Q4 2024. Meanwhile, the MBA's forecast for Q4 2024 is 6.1% and 5.9% for Q1 2025.

What is the current interest rate in the US? ›

What is the current Fed interest rate? Right now, the Fed interest rate is 5.25% to 5.50%. The FOMC established that rate in late July 2023.

What Is the Current Prime Rate? As of May 20, 2024, the current prime rate is 8.50%, according to The Wall Street Journal's Money Rates table. This source aggregates the most common prime rates charged throughout the U.S. and in other countries. The federal funds rate is currently 5.25% to 5.50%.

Projections suggest that we may see no rate increases in 2024, and that the Fed might start dropping its rate later this year, according to the CME FedWatch Tool on April 30. If the Fed rate drops, CD rates will likely follow suit, though it's up to each bank and credit union if and when that occurs.

Basic Info. Target Federal Funds Rate Upper Limit is at 5.50%, compared to 5.50% yesterday and 5.00% last year. This is higher than the long term average of 2.64%.

US Inflation Rate is at 3.36%, compared to 3.48% last month and 4.93% last year. This is higher than the long term average of 3.28%.

Key takeaways

The Fed has announced that they will not raise interest rates this month. The general consensus among officials is that inflation will continue to trend downward.

The FOMC makes all decisions about the “stance” of U.S. monetary policy to help move the economy toward the congressionally mandated goals of maximum employment and price stability.

Effective Federal Funds Rate is at 5.33%, compared to 5.33% the previous market day and 5.08% last year.