US FEDERAL PAUSES RAKE HIKE,SEES TIGHTER POLICY FOR THE YEAR

US Fed pauses rate hike, sees tighter policy for the year

INFLATION REMAINS ELEVATED'

Change Since Rate Hike Cycle Began

INDIA: 250 BPS

US: 525 BPS

According to Sources from Washington media thru newspaper

The US Federal Reserve held interest rates steady on Wednesday but stiffened its hawkish stance, with a further rate increase projected by the end of the year and monetary policy kept significantly tighter through 2024 than previously expected.

As they did in June, Federal policymakers at the median still see the central bank's benchmark overnight interest rate peaking this year in the 5.5-5.75% range-just a quarter of a percentage point above the current range.

But from there, the Fed's updated quarterly projections show rates falling only half a percentage point in 2024 compared to the full percentage point of cuts an ticipated at the meeting in June. With the federal funds rate falling to 5.1% by the end of 2024 and 3.9% by the end of 2025, the central bank's main measure of inflation is projected to drop to 3.3% by the end of this ye ar to 2.5% next year and to 2.2% by the end of 2025.

"Inflation remains elevated," the rate-setting Federal Open Market Committee (FOMC) said in a policy statement that included projections incorporating stronger economic and job growth than prior forecasts,keeping prospects for a "soft landing" squarely in view.

Financial markets had widely expected that the Fed would leave rates unchanged. While investors have been banking on significant Fed rate cuts next year, the expectations are clouded by the projections showing 10 of 19 officials see the policy rate re- maining above 5% through next year.