Latest News by Industry
The Federal Reserve has decided to keep the interest rates at 5-1/4 to 5-1/2 percent. This is in pursuit of its dual mandate of achieving maximum employment and maintaining inflation at a 2 percent rate over the long term, the Fed Reserve said in a press release.
The FOMC has said that economic activity in the United States has decelerated from its robust performance in the third quarter while inflation remains at elevated levels amid signs of slowing.
Job gains have continued even if at a moderated pace compared to earlier in the year, and the unemployment rate remains low, according to the press release.
The Fed Reserve has been aggressively fighting inflation through a series of rate increases beginning from March 2022 until July 2023. It raised the rates 11 times during the period pushing up the base rates from the 0.25-0.50 range in March 2022 to the 5.25-5.50 range in July 2023, after which the rates have been kept stable.
The committee has affirmed that the U.S. banking system is sound and resilient. It noted that tighter financial and credit conditions for both households and businesses could potentially exert downward pressure on economic activity, hiring, and inflation. However, the extent of these effects remains uncertain, and the Committee emphasized its unwavering attention to inflation risks.
In pursuit of its dual mandate to achieve maximum employment and maintain inflation at a 2 percent rate over the long term, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent, it said. The Committee underscored its commitment to continuously assess incoming information and its implications for monetary policy. In determining the necessity of any further policy firming to bring inflation back to its target, the Committee will consider the cumulative tightening of monetary policy, the time lags associated with its impact on economic activity and inflation, and evolving economic and financial developments. Additionally, the Committee reiterated its intention to reduce its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as previously announced.
The Committee reaffirmed its dedication to returning inflation to the 2 percent objective and pledged to monitor incoming information for its implications on the economic outlook. It expressed readiness to adjust the stance of monetary policy as needed should risks emerge that could hinder the Committee's goals. The Committee's decision-making process will incorporate a broad range of data, including labor market conditions, inflation pressures, inflation expectations, and developments in financial and international markets.
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lisa D. Cook; Austan D. Goolsbee; Patrick Harker; Philip N. Jefferson; Neel Kashkari; Adriana D. Kugler; Lorie K. Logan; and Christopher J. Waller.
Please read the full press release here.