Federal Reserve opts to leave rates unchanged but maintains hawkish stance

investmentweek.co.uk:

Fed chair Jerome Powell said he still believed the US could achieve a 'soft landing', noting he had 'always thought that the soft landing was a plausible outcome'.

After a two-day meeting, the Fed declared that its federal funds rate would be held in the 5.25 and 5.5% range, the same level as when it last increased rates in July.

Rates have risen 11 times since March 2022 from near zero, but yesterday's (20 September) decision marked the second time this year that the Fed left interest rates unchanged to evaluate the effects of prior hikes on inflation and the overall economy.

US unemployment ticks up in August to 3.8%

Fed chair Jerome Powell said in his Federal Open Market Committee statement: «Recent indicators suggest that economic activity has been expanding at a solid pace. Job gains have slowed in recent months but remain strong, and the unemployment rate has remained low.»

Powell also noted that inflation remained «elevated». Inflation has fallen sharply from an annual rate of 9.1% last June to 3.7% in August, but the rate of inflation remains well above the Fed's target of 2%.

«The committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the committee's goals,» he said. 

In a press conference, Powell explained he still believed the US could achieve a «soft landing», noting he had «always thought that the soft landing was a plausible outcome».

Jackson Hole: Analysts expect hawkish Fed with no major tone shift

Alexandra Wilson-Elizondo, deputy CIO for multi-asset strategies at Goldman Sachs Asset Management, said the release was «more hawkish than expected». 

«While a share of past policy tightening is still in the pipeline, the Fed