Fed to leave rates unchanged on Sept. 20; cut unlikely before Q2 2024: Reuters poll

FILE PHOTO: Federal Reserve Board Building in WashingtonBENGALURU - The Federal Reserve will leave its benchmark overnight interest rate unchanged at the end of its Sept. 19-20 policy meeting and probably wait until the April-June period of 2024 or later before cutting it, according to economists in a Reuters poll.

More than 95% of economists, 94 of 97, in the Sept. 7-12 Reuters poll predicted the U.S. central bank would hold the federal funds rate in the current 5.25%-5.50% range next week, in line with market expectations. "While there has been meaningful progress to date on inflation ... the Fed will not be able to take this for granted."

House prices and rents were also expected to remain elevated now that a relatively brief U.S. housing market correction appears to be over, according to a separate Reuters poll. "Tight labor and housing markets present upside risk to inflation ... That means that absent a recession, policymakers are likely to keep policy rates on hold well into 2024," said Andrew Hollenhorst, chief U.S. economist at Citi.

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