The US Federal Reserve skipped an interest rate increase Wednesday, as widely expected, and kept its federal funds rate unchanged between 5% - 5.25%.
"Recent indicators suggest that economic activity has continued to expand at a modest pace. Job gains have been robust in recent months, and the unemployment rate has remained low," it said in a statement.
The Federal Open Market Committee (FOMC), however, noted that inflation remains elevated.
"Holding the target range steady at this meeting allows the Committee to assess additional information and its implications for monetary policy," it said. "In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”
The decision to keep interest rates unchanged was unanimous as all 11 members of the FOMC voted in favor of the move.
It is the first rate hike skip by the Fed since January 2022 as the central bank raised interest rates by a total of 500 basis points from March 2022 to May 2023 in 10 meetings to fight record inflation that climbed last summer to its highest in more than 40 years, AA reports.
