The Federal Reserve Open Market Committee left short-term interest rates unchanged at 5.25 - 5.5% yesterday, where they've been since the end of July 2023, a level which Federal Reserve Chair Powell described as "restrictive". While rates are certainly higher than we've seen since the mid-2000's when compared to the last 30 years, they are still substantially off their highs.
Neither inflation nor growth are being crushed beneath the weight of too-onerous interest rates. Expect more of the same until something changes in the labor market--which continues to show signs of rude health, and which we expect to continue its expansion this Friday when we receive Non-farm Payrolls data for April.
Growth Is Good. Inflation Isn't That High. Neither Are Interest Rates.