U.S. Federal Reserve holds interest rate, saying it will take 'longer than expected' to start cutting

U.S. Federal Reserve holds interest rate, saying it will take 'longer than expected' to start cutting | CBC News LoadedU.S. Federal Reserve holds interest rate, saying it will take 'longer than expected' to start cutting

The Fed's latest policy statement, issued at the end of a two-day meeting, kept key elements of its economic assessment and policy guidance intact, noting that "inflation has eased" over the past year. In discussing interest rates, it outlined the economic conditions needed in order for borrowing costs to be lowered.

"Inflation is still too high," Powell said in a press conference after the meeting. "Further progress in bring it down is not assured and the path forward is uncertain." "Assuming it's going to take at least three months of good inflation performance to potentially turn around, this means the Fed has moved further away from cutting rates any time soon," wrote BMO deputy chief economist Michael Gregory in a note.Bank of Canada won’t speculate about cutting interest ratesThe Bank of Canada is holding its key interest rate at 5 per cent, saying it needs to see sustained slowing of inflation before it will cut the rate. It is not ruling out a June cut.

"We expect a growing gap between policy rates in Canada and the U.S., as weakening growth and inflation numbers prompt the to cut rates before the Fed and at a more aggressive pace after," wrote RBC economists Nathan Janzen and Claire Fan in a note last month.

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