The US Federal Reserve (FRB) decided to keep interest rates unchanged at the Federal Open Market Committee (FOMC) meeting held from April 30th to May 1st. Photographed in June 2022 (2024 Reuters/Sarah Silbiger)
WASHINGTON (Reuters) – Recent indicators show economic activity continues to expand at a steady pace. Employment growth remains strong and unemployment remains low. Inflation has eased over the past year, but remains high. There has been no further progress towards the Committee’s 2% inflation target in recent months.
The committee aims to maximize employment and achieve a long-term inflation rate of 2%. The Committee judges that the balance of risks to employment and inflation targets has improved over the past year. The economic outlook is uncertain, and the Committee continues to pay close attention to inflation risks.
In support of that goal, the Committee decided to maintain the target range for the federal funds rate at 5.25-5.50%. In considering any adjustments to the target range for the federal funds rate, the Committee will carefully evaluate emerging data, the changing outlook, and the balance of risks.
The Committee does not expect that a reduction in the target guidance range will be appropriate until there is greater confidence that inflation is sustainably moving toward 2%. Additionally, the Committee will continue to reduce its holdings of Treasury securities and agency loan-backed securities. Starting in June, the committee will reduce the monthly redemption limit for U.S. Treasury securities from $60 billion to $25 billion, slowing the decline in securities holdings. The Committee will maintain a monthly redemption cap of $35 billion on agency loan-backed securities and reinvest principal payments in excess of this cap in Treasury securities. The Committee is strongly committed to returning inflation to the 2% target.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of forthcoming information on the economic outlook. If risks arise that could impede the achievement of the Committee’s objectives, the Committee stands ready to make appropriate adjustments to its monetary policy stance. The Committee’s assessment considers a wide range of information, including labor market conditions, inflation pressures, inflation expectations, and financial and global developments.
Those voting in favor of the policy decision were Chairman Jerome Powell, Vice Chairman John Williams, Thomas Birkin, Michael Barr, Raphael Bostic, Michelle Bowman, Lisa Cook, Mary Daley, and Philip. Commissioners Jefferson, Adriana Kugler, Loretta Mester, and Christopher Waller.
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