Fed Holds Rates as Inflation Cools to 3.1%

The Federal Reserve signalled continued patience on rate cuts despite inflation cooling to 3.1% annually. Chairman Powell stated the bank needs more good data before gaining sufficient confidence to cut from the current 23-year high of 5.25-5.50%. Futures markets shifted to price in just one or two cuts this year from earlier expectations of three. The 10-year Treasury yield rose 8 basis points to 4.42%. Equity markets ended flat while gold pulled back modestly. The Fed's patience is driven by persistent services inflation even as goods price pressures have largely eased.