The Federal Reserve decided to keep its key interest rate unchanged. The upper bound stays at 4.50 percent, matching expectations and showing no shift from the previous level.
The move was made by the officials when they witnessed signals of slower first-half-of-the-year growth. There are recent data on softened points of economic activity, but the labor market remains robust. There is low unemployment.
Inflation, however, continues to stay above target levels. The Fed aims for a 2 percent inflation rate in the long term. Policymakers stressed that the outlook for the economy remains uncertain. To reach their goals, Fed officials will hold the federal funds rate steady between 4.25 and 4.50 percent.
Global and financial data to guide Fed decisions
They will also keep shrinking their balance sheet by unloading Treasury securities and mortgage-backed assets. Future moves will be based on new data and how the entire economy is doing. The Fed is still committed to identifying the optimal balance in terms of stimulating job growth and overcoming the lowflation trend.
The Committee reiterated its willingness to revise policy if new risks endanger momentum. Officials will analyze a broad set of data, such as reports on inflation, employment conditions, monetary trends, and international developments. This close examination will inform any interest rate change in subsequent meetings.
Federal vote shows strong support for steady rates
The vote registered strong support from the majority of members. Jerome Powell and other key officials supported the move. Michelle Bowman and Christopher Waller voted against. They preferred cutting the rate by 0.25 percent. Adriana Kugler abstained.
The Fed faces a difficult job. It must bring down inflation but not hurt job growth. Leaving rates steady gives the central bank breathing space to see the effect of earlier hikes on the economy.
Market observers will now look to the Fed’s subsequent actions. In the meantime, the message is that of caution, patience, and close watching.
