The US Federal Reserve decided to keep interest rates at a 23-year high due to ongoing concerns about inflation. Despite some cooling in the Fed’s preferred inflation index from its peak in 2022, inflation remains above the target at 2.7 percent. This was announced by Fed Chair Jerome Powell, who stated that rate cuts would not be considered until there was greater confidence that price growth was moving towards the 2 percent target.
Powell emphasized that the Fed was prepared to keep the current interest rate for as long as necessary. However, he indicated that a rate hike at the next policy meeting in June was unlikely, leading to a mixed reaction in the stock market.
The S&P 500 initially rallied in response to the announcement but ended mostly down as investors processed the news. London’s FTSE 100 and Japan’s Nikkei 225 also experienced fluctuations in response to the Fed’s decision, with international markets also affected by global economic trends.
Overall, it seems that concerns about inflation are still weighing heavily on global markets, with central banks around the world taking different approaches to manage these concerns and maintain financial stability.
