The Federal Reserve yesterday maintained the target range for the federal funds rate at 5.25% to 5.5% in support of its goals to “achieve maximum employment and inflation at the rate of 2%.”
The Fed in a statement noted several observations:
“Recent indicators suggest that economic activity expanded at a strong pace in the third quarter. Job gains have moderated since earlier in the year but remain strong, and the unemployment rate has remained low. Inflation remains elevated.
The U.S. banking system is sound and resilient. Tighter financial and credit conditions for households and businesses are likely to weigh on economic activity, hiring and inflation. The extent of these effects remains uncertain. The committee remains highly attentive to inflation risks.”
This is the second consecutive meeting that resulted in no rate hike since officials started raising rates in March 2022. Since that time, they raised rates at the fastest pace in four decades, according to reporting by The Wall Street Journal.
The Fed said that to return inflation to 2%, the committee will consider the cumulative tightening of monetary policy, the lags with which that policy affects economic activity and inflation, and economic and financial developments.
The committee will continue to reduce its holdings of treasury department securities and agency debt and mortgage-backed securities as previously announced.
