Federal Reserve leaves interest rates in place

The Federal Reserve on Wednesday again said that it would keep the target range for its interest rates 5.25-5.5%. The Federal Open Market Committee has kept interest rates in place for five meetings in a row.

The committee said it does not expect to reduce its interest rates “until it has gained greater confidence that inflation is moving sustainably toward 2%.” The Bureau of Labor Statistics earlier this month reported that annual consumer price inflation sat at around 3.2%.

What did the Fed have to say about price increases? Federal Reserve Chairman Jerome Powell said that “inflation is still too high, ongoing progress in bringing it down is not assured, and the path forward is uncertain.” But he indicated the Fed would not raise interest rates—that the central bank’s leadership believed its policy rate was “at its peak for this tightening cycle.” He said if the economy followed the Fed’s expectations, it could begin reducing interest rates later this year.

Did the Fed say anything about its expectations for the economy? The Committee said it would keep in mind the evolving outlook for the economy in its decisions. It added Economic Projections about the prospects of inflation, the U.S. gross domestic product, and the unemployment rate. But it said a “considerable amount of uncertainty” accompanied its projections.

This story originally appeared in WORLD. © 2024, reprinted with permission. All rights reserved.