The Federal Reserve voted against lowering the benchmark interest rate Wednesday, marking the first time it has chosen to hold steady since July.<\/b>
\nJan. 28 The Federal Reserve voted against lowering the benchmark interest rate Wednesday, marking the first time it has chosen to hold steady since July.
The committee left the rate unchanged to better assess how prior rate cuts are affecting the nation’s economy over several months, because the inflation rate remains elevated at 2.7%, and unemployment is becoming more stable after falling to 4.4% in December, CNN reported.
Federal Reserve Chairman Jerome Powell said the Federal Reserve had lowered the central bank’s lending rate by 175 points, or 1.75%, after initiating three cuts over the past year and a half.
The central bank’s lending rate remains steady at between 3.5% and 3.75%.
There was broad support on the committee for holding steady today\u00a0\u00bb, Powell told media. \u00ab\u00a0We’re not trying to articulate a test for the next cut.\u00a0\u00bb
He said the board is assessing the economy from one meeting to the next and acknowledged that the risk of inflation has lessened.
\u00ab\u00a0We’ll find our way forward as the data evolve\u00a0\u00bb, Powell said, adding that tariffs account for most of the \u00ab\u00a0overrun on prices.\u00a0\u00bb
He said there is ongoing \u00ab\u00a0disinflation\u00a0\u00bb on services and expects prices on goods to reach a maximum due to tariffs and decline soon after.
In the longer term, inflation expectations remain in the 2% range, and there is a lessened concern about unemployment, Powell said, adding that the risks of inflation and unemployment have diminished.
\u00ab\u00a0Available indicators suggest that economic activity has been expanding at a solid pace\u00a0\u00bb, the Federal Reserve said in a news release on Wednesday.
\u00ab\u00a0Job gains have remained low, and the unemployment rate has shown some signs of stabilization. Inflation remains somewhat elevated\u00a0\u00bb, the Fed said.
\u00ab\u00a0In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the committee will carefully assess incoming data, the evolving outlook, and the balance of risks\u00a0\u00bb, it added.
\u00ab\u00a0The committee is strongly committed to supporting maximum employment and returning inflation to its 2% objective.\u00a0\u00bb<\/p>\n