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Federal Reserve officials recently left interest rates unchanged and forecast a decrease in borrowing costs by the end of the year as inflation eases. Rates are being held at 5.3%, having remained steady since July 2023. After battling inflation for nearly two years, they are not quite ready to dismiss inflation entirely, and are therefore keeping rates at a higher level in an effort to weigh on inflation.
Alongside this decision, policymakers released their quarterly economic estimates, which project that borrowing costs will be at 4.6% by the end of 2024. This suggests that policymakers will still likely make three quarter-point rate cuts this year.
A recent New York Times article reported that the goal of these decisions is to ensure that inflation cools down to a normal level without an economic slowdown. With higher interest rates, the goal is to bring price increases under control while also trying to avoid causing a recession.
Officials are looking to reduce interest rates in the future but are doing so cautiously and will not confirm when cuts will begin. They want to ensure that timing is correct to avoid doing any economic damage or impacting employment levels.
After rapid increases in rates from March 2022 to mid-2023, officials paused increases as inflation began to decline at the end of 2023.
Price increases are far more moderate than they were a few years ago, with the Consumer Price Index measure at 3.2% in February, down from the 9.1% peak in 2022. However, inflation is still lingering above the Fed’s goal of 2%, and despite progress in 2023, the decline in inflation has stalled. The Fed needs more confidence that inflation will return to 2% before rate cuts will begin.
While inflation has declined in recent months, the aftermath of an increased cost of living has impacted the lives of many individuals, and those looking to refinance loans or seek out borrowing opportunities at a lower interest rate may be running out of time. Higher prices and expenses have caused a great deal of financial stress for consumers, and filing for bankruptcy may be an option to help position you for a more positive economic outlook.
Contact Sader Law Firm at (816) 561-1818 for a free phone consultation and learn more about how bankruptcy might be the right move for you.
