The Federal Open Market Committee voted unanimously on 12 June 2024 to hold the federal funds rate target range at 5.25% to 5.50%.
Consumer price index inflation in the United States stood at 3.3% year-on-year through May 2024, above the Federal Reserve's 2% target. Fed officials reiterated that they needed greater confidence that inflation was on a sustained path back to 2% before moving to ease policy.
DOT PLOT SHIFTS TO SIGNAL ONE CUT IN 2024
The June 2024 update to the Summary of Economic Projections — the quarterly document in which FOMC members individually submit their forecasts for the policy rate — delivered a more hawkish signal than the equivalent document published in March. The median projection for the federal funds rate at end-2024 shifted to imply just one quarter-point rate reduction over the remainder of the year, down from the three cuts that the March 2024 Summary of Economic Projections had signalled as the median expectation.
COMMITTEE REMAINS DATA-DEPENDENT
In the press conference following the June decision, Chair Jerome Powell underlined that the path for rates would continue to be guided by incoming economic data, particularly readings on inflation and the labour market. The Committee did not provide explicit guidance on the timing of any future reduction.
The next scheduled FOMC meeting is set for late July 2024. Based on the June projections, the median official expected only one quarter-point cut before the end of 2024, although eight of the 19 participants still pencilled in two cuts.