US Fed Keeps Interest Rates Unchanged For Eighth Time At 5.25-5.5%, Hints At September Cut
The Federal Open Market Committee decided unanimously to hold its key interest rate at 5.25–5.5% in July.
The US Federal Reserve has maintained its key interest rate for the eighth consecutive time, as expected, and maintained its wait-and-watch approach for inflation to ebb. It however kept the rate cut on the table for the next meeting in September.
The Federal Open Market Committee decided unanimously to hold its key interest rate at 5.25–5.5% in July, according to a statement on Wednesday.
A Bloomberg poll of economists forecasted that the Fed would keep rates steady.
The central bank raised rates by 25 basis points in July last year, bringing the benchmark rate to its highest level in 22 years. However, since then, it has left the rates unchanged.
Fed On US Inflation Outlook
"Inflation has eased over the past year, but remains somewhat elevated. In recent months, there has been some further progress toward the Committee's 2 percent inflation objective," the Fed said in its statement.
"The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate," it added.
Earlier this month, data showed US core Consumer Price Inflation for June rose 0.1% from May, the smallest advance since August 2021.
On the US labour market, the Fed said that the unemployment rate has moved up, but remained low even as job gains have moderated.
"If the labour market were to weaken unexpectedly or inflation were to fall more quickly than anticipated, we are prepared to respond," Fed Chair Jerome Powell said in a press conference.
He emphasised that no decision has been made on future meetings, including September. Further, he said if the US economy remains solid and inflation persists, the central bank could keep rates where they are as long as needed.
