Fed maintains outlook for 3 rate cuts

Fed maintains interest rates, projects three rate cuts despite inflation concerns.

By Nadia Elbilassy | @Nadia Elbilassy | 21 March 2024

Market open
  • Officials decided unanimously to leave the benchmark federal funds rate in a range of 5.25% to 5.5% for a fifth straight meeting.

  • Officials lift forecasts for growth and core inflation in 2024 & traders boost the probability of rate cuts in June.

  • Projections suggest a growth rate of 2.1% higher than 1.4% estimated last year.

On the Market Watch:

Rate Cuts

The Federal Reserve opted to keep interest rates unchanged as widely expected while also projecting three rate cuts within the U.S. this year, sending unfazed signals in the market regarding persistent inflation concerns. Officials unanimously opted to maintain the benchmark federal funds rate within a range of 5.25% to 5.5%, the highest since 2001, for the fifth consecutive meeting.

“It is still likely in most people’s view that we will achieve that confidence and there will be rate cuts.” disregarding recent inflation upticks in recent months.


The Fed's "dot plot" revealed that 10 officials foresee three or more quarter-point cuts this year, while nine anticipate two or fewer.

Moreover, the Fed's updated policy stance also reflects an improved outlook for the U.S. economy. Projections now suggest a growth rate of 2.1% for this year, a significant increase from the previous 1.4% estimate.

They also raised forecasts for underlying inflation to 2.6% from 2.4%.

Officials also reaffirmed their commitment to continue reducing its balance sheet by up to $95 billion per month.