The Federal Reserve is loath to get involved in elections or politics. But 2024 is already shaping up to be quite the collision course.

Central bankers are eyeing multiple interest rate cuts starting sometime this year. And as the months pass, the chances grow that those cuts end up juicing the economy in the run-up to Election Day — just as Republicans and Democrats fight to leverage the economy in their appeals to voters.

The Federal Reserve’s definition of its inflation target suggests it should aim to drive the inflation rate below 2% for the next several years.

Central bank officials, though, have avoided entertaining any such possibility. Given the disconnect, experts suggest, the Fed should clarify its target to forestall any confusion by explaining it won’t aim for very low inflation in the years to come. 

From Wall Street traders to car dealers to home buyers, Americans are eager for the Federal Reserve to start cutting interest rates and lightening the heavy burden on borrowers.

The Fed is widely expected to do so this year — probably several times. Inflation, as measured by its preferred gauge, rose in the second half of 2023 at an annual rate of about 2% — the Fed’s target level. Yet this week, several central bank officials underscored that they weren’t ready to pull the trigger just yet.

For Federal Reserve Chair Jerome Powell, deciding when to cut interest rates is hard enough: Too soon, and inflation could rise again. Too late, and unemployment might shoot higher.

The challenge is doubly difficult this year because he is doing it in the glare of election-year politics.

Allies of former President Donald Trump, the Republican front-runner, have already argued that the central bank is seeking to help President Biden by signaling that cuts are coming.

The U.S. central bank held rates at their current range for the fourth straight time, signaling that the hiking cycle may be over setting up the stage for possible rate cuts in 2024. The possible reduction of rates, which, at their current two-decade highs, have helped push up borrowing costs across the economy, could be a boost for President Joe Biden as they could reduce the cost of buying a home and business investment.

The Federal Reserve held interest rates steady Wednesday for the fourth-straight meeting, keeping its benchmark lending rate at a 23-year high, as Wall Street eagerly awaits rate cuts sometime this year.

Officials at the US central bank have left interest rates at a 23-year high, while offering little certainty about the path ahead for borrowing costs.

The decision from the Federal Reserve again kept the target range for its benchmark rate, which helps set borrowing costs for mortgages, credit cards and other loans, at 5.25%-5.5%.

That is sharply higher than two years ago, when the Fed started raising rates to fight inflation.

Investors expect rate cuts this year.

The Federal Reserve on Wednesday held interest rates steady for the fourth straight time, and cracked open the door to reducing rates later this year if inflation continues to subside.

The widely expected decision left interest rates unchanged at a range of 5.25% to 5.5%, the highest level in 22 years.  

The Federal Reserve held interest rates steady on Wednesday but signaled that rates could fall in the coming months if inflation continues to cool.

Policy makers have kept their benchmark interest rate between 5.25% to 5.5% — the highest in over two decades — since July.

In its post-meeting policy statement, the Fed's rate-setting committee replaced a reference to possible future rate hikes with a more neutral reference to "adjustments" in interest rates.

Still, policymakers added a note of caution.

The U.S. economy grew at a faster pace than expected at the end of 2023, underscoring its resilience even in the face of still-high inflation and steep interest rates.

Gross domestic product, the broadest measure of goods and services produced across the economy, grew by 3.3% on an annualized basis in the three-month period from October through December, the Commerce Department said in its first reading of the data Thursday.