The Federal Reserve System (Central Bank of the USA) kept the key interest rate unchanged at a level of 4.25 to 4.5 percent, providing no signals of impending cuts to borrowing costs in the context of a decreasing unemployment rate, sustained economic growth, and rising inflation levels above the target level. After several months, during which the inflation data practically did not change, the Fed changed the tone of its last statement, noting that inflation "is expected to reach" a target of 2 percent, changing only that price increases "remain high."
Inflation remains above the level of more than half a percent above the target level set by the Federal Reserve. Officials at the Fed believe that progress in lowering inflation will occur this year; however, they have so far maintained interest rates without change, awaiting confirmation of this in the data. This was stated in a statement by the Open Market Committee following a two-day meeting where it was noted that "economic activity continues to strengthen at a strong pace."
The unemployment rate has remained at a low level in recent months, and conditions in the labor market have remained tight. When considering the pace and temporary trends of additional changes in the interest rate range, the committee will thoroughly evaluate the received data, forecasts, and assess risks.
The new statement from the committee and its unanimous agreement on keeping the interest rate unchanged confirms that the Federal Reserve is waiting for more detailed data on inflation, employment, and clarity regarding the impact of President Donald Trump's policy. The Chair of the Federal Reserve, Jerome Powell, will hold a press conference at 19:30 Greenwich Mean Time.
The decision to maintain the unchanged interest rate was widely anticipated after the complete reduction to one percentage point, broken down into three consecutive reductions over the past year. The Federal Reserve System announced the maintenance of its monetary-credit policy.
