Washington, DC, USA - May 28, 2024

The Federal Reserve's decision to signal that there will be fewer interest rate cuts this year accentuates its divergence from its peers, who have already begun cutting rates.

The Fed's message is twofold: not only do officials now anticipate only one rate cut this year, down from the three they projected in March, but they also see their easing cycle bottoming out at a higher level than previously expected, underscoring that the era of higher rates will endure.

This contrasts with the Bank of Canada, which last week lowered its benchmark overnight interest rate by 25 basis points to 4.75%, making it the first central bank in the Group of Seven to initiate an easing cycle. The European Central Bank soon followed, cutting its benchmark interest rate by 25 basis points to 3.75 per cent, while the Swiss National Bank cut borrowing costs in March.

SHOTLIST:
1. Various from the Fed building;
2. Various from the U.S. Department of Labor Building.