Interest rates are not moving. The Federal Reserve announced a continued pause on interest rate cuts after the conclusion of the Federal Open Market Committee meeting today (April 29).<\/p>\n
The Fed has now held rates steady for three straight meetings, keeping its benchmark rate at 3.5 to 3.75 percent.<\/p>\n
Zooming in: A slowdown in the labor market with low job gains and higher energy costs due to the conflict in the Middle East were both attributed to the decision.<\/p>\n
\u201cWe see the current stance of monetary policy as appropriate to promote progress toward our maximum employment and two percent inflation goals,\u201d said Federal Reserve Chairman Jerome Powell. \u201cDevelopments in the Middle East are contributing to a high level of uncertainty about the economic outlook, and we will remain attentive to risks of both sides of our dual mandate.\u201d<\/p>\n
Worth noting: The meeting was Powell\u2019s last as the Fed Chairman.<\/p>\n
He announced he will be staying with the Fed as a governor, awaiting assurances that the criminal investigation into alleged false statements regarding Fed headquarters renovation costs was truly over. The Justice Department announced last week it was ending its investigation.<\/p>\n
What they\u2019re saying: \u201cI am encouraged by recent developments and watching the remaining steps in this process carefully. My decisions on these matters will continue to be guided entirely by what I believe is in the best interest of the institution and the people we serve,\u201d Powell said.<\/p>\n
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Also today, Powell\u2019s presumptive replacement, Kevin Warsh, had his nomination for the post advance out of the Senate Banking Committee. The nomination will now head to a full Senate vote.<\/p>\n
Regarding the auto industry: The Fed\u2019s rate decision is expected to have little impact on auto financing, where rates have remained elevated. The average interest rates remain between 9.7% (new) and 14.36% (used), according to Cox Automotive\u2019s Dealertrack data.<\/p>\n
In fact, the Fed\u2019s decision, given the high gas prices and the labor market, was not a surprise to many in the automotive industry, including Cox Automotive Chief Economist Jeremy Robb.<\/p>\n
\u201cNearly two months of sustained higher energy prices reinforce a wait\u2011and\u2011see approach and complicate the near\u2011term path toward easing,\u201d Robb said. \u201cFor auto buyers and dealers, that likely means loan rates stay higher for longer, even as the broader economy continues to perform better than many leading indicators would suggest.\u201d<\/p>\n
Looking ahead: Robb added, \u201cThe likely incoming Fed Chair Kevin Warsh will inherit a difficult job\u2014one made more challenging by persistent inflation pressures, uneven labor data, and the need to preserve central bank credibility amid a heavy political presence. The inflation story could improve in the second half of the year, but in the current environment, there is little reason to expect any movement by the Fed.\u201d<\/p>\n
Powell noted that given substantive inflationary shocks in the past six years, from the pandemic, Ukraine invasion, tariffs, and the conflict in Iran, the economy remains resilient and consumer spending remains high.<\/p>\n
From his perspective: \u201cIt’s been remarkably resilient for some years now. The U.S. economy has powered through shock after shock, and consumers are still spending,\u201d Powell said.<\/p>\n
\u201cThat’s what the banks will tell you, credit card companies will tell you. The retail sales numbers we got to see recently. People are still spending. How long can that go on in a world where, if gas prices were to go up a bunch more, that’s taking spendable money out of people’s pockets? Right now, we don’t see much slowdown yet\u2026 But you think you will because people have a certain amount of money they spend. If they’re spending 25% more on gas or something like that, that’s going to come out of other spending. But we don’t see it yet.\u201d<\/p>\n
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#FederalReserve #InterestRates #FOMC #EconomicOutlook #MiddleEastConflict #JeromePowell #KevinWarsh #AutoIndustry #Inflation #MonetaryPolicy<\/p>\n","protected":false},"excerpt":{"rendered":"
Interest rates are not moving. The Federal Reserve announced a continued pause on interest rate cuts after the conclusion of the Federal Open Market Committee meeting today (April 29). The Fed has now held rates steady for three straight meetings, keeping its benchmark rate at 3.5 to 3.75 percent. Zooming in: A slowdown in the […]<\/p>\n","protected":false},"author":2,"featured_media":13080,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33],"tags":[],"class_list":["post-13079","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-middle-east-news"],"_links":{"self":[{"href":"https:\/\/fajr.news\/index.php?rest_route=\/wp\/v2\/posts\/13079","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fajr.news\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fajr.news\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fajr.news\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/fajr.news\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13079"}],"version-history":[{"count":0,"href":"https:\/\/fajr.news\/index.php?rest_route=\/wp\/v2\/posts\/13079\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/fajr.news\/index.php?rest_route=\/wp\/v2\/media\/13080"}],"wp:attachment":[{"href":"https:\/\/fajr.news\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13079"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fajr.news\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13079"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fajr.news\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13079"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}