MONSITJ - STOCK.ADOBE.COM PHOTOThe Federal Reserve yesterday left the benchmark federal-funds rate at 4.25% to 4.5% after cutting it three times last year, in September November and December.
According to a statement from the Fed, recent indicators suggest economic activity has continued to expand, unemployment has stabilized, and labor market indicators remain solid, all factors in the board’s decision-making.
“Officials at the Fed are trying to strike the right balance between ensuring that high inflation is fully vanquished after the worst shock in decades while also safeguarding the labor market from weakening excessively,” according to reporting in The New York Times. “Lowering interest rates too slowly risks jeopardizing jobs, whereas lowering interest rates too quickly risks inflation getting stuck above the Fed’s 2% goal. Mr. Powell on Wednesday said those risks still appeared to be in balance.”
According to Reuters, Powell told reporters: “We do not need to be in a hurry to adjust our policy stance, and monetary policy is well-positioned for the challenges at hand. … We know that reducing policy restraint too fast or too much could hinder progress on inflation.”
