The US Federal Reserve announced that it has decided to hold benchmark rates steady at a rate of 5.25% to 5.5% today, as the Wall anticipated.
The statement issued by the Federal Open Market Committee (FOMC) indicated that job gains have moderated since early last year, while inflation has eased a bit but is still elevated.
The voting to hold rates was unanimous.
The Fed holds a mission of a 2% rate of inflation and full employment, and the Fed said the economic outlook remained uncertain while inflation was “moving better into balance.” Earlier this month, the US Bureau of Labor Statistics reported that in December, the Consumer Price Index for All Urban Consumers increased 0.3% and rose 3.4% over the last 12 months.
The FOMC said it will continue reducing its holdings of Treasury securities agency debt and agency mortgage-backed securities.
Fed Chairman Jerome Powell said they are firmly committed to the 2% goal while noting their policy actions have moved well into restrictive territory and rates have probably peaked. Powell noted that core inflation currently stood at 2.9%. Powell stated that they had a ways to go to potentially achieve a soft landing.
While there is a lot of disagreement as to when most analysts anticipate multiple rate cuts later in 2024. Chairman Powell said the timing of the rate cuts would hinge on their confidence that inflation was heading in the right direction on a sustainable basis.