For the fifth consecutive month, the Federal Reserve opted to hold interest rates in place.
The central bank’s policy making Federal Open Market Committee voted unanimously to keep its benchmark overnight borrowing rate in a range between 5.25% and 5.5%, which is where it has kept since July 2023.
“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%,” said the Fed in a statement. “In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2% objective.”
In a press conference, Fed Chairman Jerome Powell hinted that rate cuts were in the future, but he would not commit to a specific timeline and added there was no hurry to change the current status.
“We believe that our policy rate is likely at its peak for this type of cycle, and that if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year,” Powell said. “We are prepared to maintain the current target range for the federal funds rate for longer if appropriate.”
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