Federal Reserve holds interest rates steady amid inflation uncertainty

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QI Research CEO and chief strategist Danielle DiMartino Booth reacts to the Federal Reserve leaving interest rates unchanged on 'Making Money.'

The Federal Reserve on Wednesday announced that it will leave interest rates unchanged amid uncertainty about inflation and economic conditions.

The Fed's decision leaves the benchmark federal funds rate at a range of 4.25% to 4.5% and follows three consecutive interest rate cuts at the central bank's most recent meetings — including a 50-basis-point cut in September as well as a pair of 25-basis-point reductions in November and December.

«Recent indicators suggest that economic activity has continued to expand at a solid pace,» wrote members of the Federal Open Market Committee (FOMC), the group responsible for guiding the Fed's monetary policy. «The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid. Inflation remains somewhat elevated.»

The FOMC statement said that the Fed continues to pursue its dual mandate of achieving maximum employment and inflation at 2% over the longer run. It added that the «economic outlook is uncertain, and the Committee is attentive to risks to both sides of its dual mandate.»

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Federal Reserve Chair Jerome Powell holds a press conference at the end of the two-day Federal Open Market Committee meeting at the Federal Reserve in Washington, D.C., on March 20, 2024. (Photo by Mandel Ngan/ AFP via Getty Images / Getty Images)

FOMC members were unanimous in the decision to leave rates unchanged at this time. The committee's statement added that policymakers «would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that