Fed Bets on “No Landing” Scenario, Lifts Long-Term Rate Projections
For a fifth consecutive meeting, the US Federal Reserve’s policy committee held benchmark borrowing costs at a 23-year high, but policymakers raised inflation forecasts and lowered the number of rate cuts expected in the years ahead – suggesting that the risk of a re-acceleration in price growth continues to take precedence over signs of incipient economic weakness in driving the central bank’s reaction function. In a broadly unchanged statement, the Federal Open Market Committee said it “does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward...