Federal Reserve Holds Rates Steady
The Federal Reserve recently signaled that it may be done raising interest rates, but it is currently holding rates steady at 5.25%-5.5%.
For the fourth consecutive time, the Federal Open Market Committee (FOMC) unanimously voted not to raise the fed funds rate, the amount banks charge each other for overnight loans.
At the conclusion of the central bank’s two-day January meeting, the FOMC removed language from its statement that had indicated a willingness to keep raising interest rates until inflation is closer to its goal of 2%. The FOMC also said it has no current plans to cut rates.
In addition, the committee’s statement condensed the factors it would consider when assessing policy. A key change was removing as a consideration the lagged effects of monetary policy.
“The Committee judges that the risks to achieving its employment and inflation goals are moving into better balance,” the statement said. “The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks.“
During his news conference, Fed Chair Jerome Powell stated that policymakers are waiting to see additional data to verify the trends are continuing and that he believes a March rate cut is unlikely.