Month: May 2024

The U.S. Federal Reserve held interest rates steady on Wednesday and signaled it is still leaning towards eventual reductions in borrowing costs, but put a red flag on recent disappointing inflation readings that could make those rate cuts a while in coming.

Indeed, Fed Chair Jerome Powell said that after starting 2024 with three months of faster-than-expected price increases, it “will take longer than previously expected” for policymakers to become comfortable that inflation will resume the decline towards 2% that had cheered them through much of last year.

That steady progress has stalled for now, and while Powell said rate increases remained unlikely, he set the stage for a potentially extended hold of the benchmark policy rate in the 5.25%-5.50% range that has been in place since July.

U.S. central bankers still believe the current policy rate is putting enough pressure on economic activity to bring inflation under control, Powell said, and they would be content to wait as long as needed for that to become apparent – even if inflation is simply “moving sideways” in the meantime.

The Fed’s preferred inflation measure – the personal consumption expenditures price index – increased at a 2.7% annual rate in March, an acceleration from the prior month.

“Inflation is still too high,” Powell said in a press conference after the end of the Federal Open Market Committee’s two-day policy meeting. “Further progress in bringing it down is not assured and the path forward is uncertain.”

Last week, a Dane County court overturned a 2022 decision by the Public Service Commission that would have allowed family in Stevens Point to use third-party financing to install solar on their home.

Under that agreement, the family would lease the system from North Wind Renewable Energy Cooperative. Similar lease agreements are common in other states, but utilities have opposed their use in Wisconsin, saying they are not allowed under existing state law.

The family in Stevens Point sold their home and did not move forward with the project, according to North Wind Founder Josh Stolzenburg.

Even so, the Wisconsin Utilities Association last year challenged the PSC’s decision in Dane County Circuit Court.

Last Friday, the court sided with the utility association, sending the issue back to the Public Service Commission. The court said the PSC incorrectly interpreted what constitutes a “public utility” in its decision because it focused on the singular project and not North Wind’s activities as a whole.

State law defines a “public utility” as any entity owns, operates, manages or controls equipment used for the “transmission, delivery or furnishing of heat, light, water or power either directly or indirectly, to or for the public.”

Utilities are largely opposed to third-party financing for solar installations, saying it violates state law by allowing installers to act as a utility without being regulated as one.

“We’re pleased with the decision of the court affirming our position that if you provide energy to the public, either directly or indirectly, you must be regulated as a public utility,” Bill Skewes, executive director for the Wisconsin Utilities Association, said in an email.