The Federal Reserve left interest rates unchanged at its March meeting for the fifth straight time as inflation remains high for many Americans. Policymakers also clarified that plans to cut rates may be pushed out further but remained committed to three cuts this year.
"The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks," policymakers noted in a statement.
The decision, which was widely expected, keeps the federal funds rate between a range of 5.25% to 5.5%, a 22-year-high. This will also keep rates for mortgages, loans and credit cards at elevated levels.
The CME’s FedWatch Tool, had expected as many as six rate cuts at the start of the year, but now with three baked in, the Federal funds rate would be at 4.6% by year's end.
CONSUMER INFLATION HOTTER THAN EXPECTED IN FEBRUARY
Inflation has not subsided as quickly as policymakers had expected. In February, consumer prices on an annual basis rose 3.2%, above economists' projections, with prices for items like rent, beef and juices and drinks rising 5.8%, 9.2% and 27%, respectively. A separate report showed that producer prices rose 1.6% last month on an annual basis, also more than expected.
While consumer inflation is down from its peak of 9.1%, it remains above the Fed's 2% mandate.
Oil prices have also started to tick up, with West Texas Intermediate crude hovering above $80 per barrel, while Brent prices, the global benchmark, are near $86 a barrel.
Last week, Treasury Secretary Janet Yellen said in an exclusive interview with FOX Business that she regretted prior comments characterizing inflation as being "transitory" and while she noted prices are easing, the decline may not be "smooth."
YELLEN: INFLATION DECLINE MAY NOT BE SMOOTH
FOX Business' Megan Henney contributed to this report.
