Fed keeps rates steady as it notes 'lack of further progress' on inflation
WASHINGTON – The Federal Reserve on Wednesday held its ground on interest rates, again deciding not to cut as it continues a battle with inflation that has grown more difficult lately.
In a widely expected move, the U.S. central bank kept its benchmark short-term borrowing rate in a targeted range between 5.25%-5.50%. The federal funds rate has been at that level since July 2023, when the Fed last hiked and took the range to its highest level in more than two decades.
The rate-setting Federal Open Market Committee did vote to ease the pace at which it is reducing bond holdings on the central bank's mammoth balance sheet, in what could be viewed as an incremental loosening of monetary policy.
With its decision to hold the line on rates, the committee in its post-meeting statement noted a «lack of further progress» in getting inflation back down to its 2% target.
«The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent,» the statement said, reiterating language it had used after the January and March meetings.
The statement also altered its characterization of its progress toward its dual mandate of stable prices and full employment. The new language hedges a bit, saying the risks of achieving both «have moved toward better balance over the past year.» Previous statements said the risks «are moving into better balance.»
Beyond that, the statement was little changed, with economic growth characterized as moving at «a solid pace,» amid «strong» job gains and «low» unemployment.
Chair Jerome Powell during the news conference following the decision expanded on the idea that prices are still rising too quickly.
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