The Fed's big question: Are high interest rates doing their job?

Share on linkedin Fed chair Jerome Powell at his March news conference. Photo: Al Drago/Bloomberg via Getty Images

That is taking imminent interest rate cuts off the table and has made the timing of their eventual arrival uncertain. It means rising odds that the Fed's next move will be a rate hike, not a rate cut, though Fed officials have stressed that's not what they anticipate.The Federal Open Market Committee is expected to leave its target interest rate unchanged in a range of 5.25% to 5.5% following the meeting Wednesday afternoon.

But the real news will be in what chair Jerome Powell says in a news conference scheduled for 2:30pm ET Wednesday.Powell and other Fed officials have expressed great certainty that their current interest rate policy — in place since last July — is restrictive, meaning it is putting the brakes on economic activity in a way that will bring inflation down over time.

Despite a shaky April, financial markets have been buoyant, with the S&P 500 index up 23% since late October and corporate lending abundant.What they're saying:

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How Long Will High CD Rates Last?Inflation has been high for years now, and while it's decreased quite a bit from its peak of 9.1% in June 2022, it's still below the Federal Reserve's target goal of 2%. To move the needle and curb spending further, the Fed has kept interest rates paused at a 23-year high at its last three meetings. While that's bad for consumers using credit cards, mortgages and loans, as higher rates mean paying more in interest on the money borrowed, it's a boon for savers, resulting in hefty interest rates on savings accounts and certificates of deposit (CDs). What goes up must come down, though, and at some point, the Fed is likely to make rate cuts once inflation is under control. While the Fed rate doesn't directly impact the rates on savings accounts and CDs, the two generally move in the same direction. So the question remains: How long will these high CD rates last? And if the Fed does cut rates, how far will CD rates have to fall? Find out the best CD options available to you today
Source: CBSNews - 🏆 87. / 68 Read more »