The Fed leaves interest rates unchanged in a range between 5.25% and 5.50%, the highest since 2001. The cost of money has been at a standstill since July. The Fed doesn't see a rate cut until it has greater confidence that inflation is moving and approaching 2%.
Inflation has slowed over the past year but still remains high . The Fed stated this at the end of the two-day meeting, speaking of economic activity that is growing at a rapid pace.
“The economic outlook is uncertain and we remain very alert to inflation risks,” the Fed says. “As it evaluates any rate adjustment, the Fed will carefully consider economic data, the evolving outlook, and the balance of risks. The Fed will not expects it to be appropriate to reduce rates until it has greater confidence that inflation is moving sustainably towards the 2% target,” reads the statement released at the end of the meeting.
“It will be appropriate at some point during the year” to reduce interest rates but, “if appropriate, we are prepared to leave them” at current levels “for longer” than expected. Fed President Jerome Powell says so.
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