The Federal Reserve maintained its benchmark interest rate on Wednesday in a range of 5.25%-5.50%, the highest in 22 years, while leaving the door open for further action as officials work to bring inflation back the central bank's 2% target.
In its statement on Wednesday, the Fed upgraded its assessment of the economy to "strong" in the third quarter from "solid" in September.
The central bank noted job gains have "moderated," after having noted in September job growth had "slowed" during the previous inter-meeting period.
"Recent indicators suggest that economic activity expanded at a strong pace in the third quarter," the Fed said. "Job gains have moderated since earlier in the year but remain strong, and the unemployment rate has remained low. Inflation remains elevated."
This upgraded characterization of the economy comes after third quarter GDP data published last week showed growth clocked in at a whopping 4.9% annualized rate over the summer months, driven in large part by strong consumer spending, punctuated by a surge in retail sales in September.
The Fed reiterated that future rate hikes would be contingent on the impact of previous rate hikes on the economy, lag effects and economic developments.
The decision was unanimous.
'Should we hike more?'
Fed Chair Jerome Powell said at a press conference following the decision that the committee "is proceeding carefully" and will continue to make decisions "meeting by meeting," making it clear the Fed has not closed the door to more hikes.
In fact, he emphasized that "the committee is not thinking about rate cuts right now at all." Instead the question he said the committee is asking is: "Should we hike more?" The idea that it might be difficult to push rates higher after pausing at two consecutive meetings "just isn’t right," he added.
