The Federal Open Market Committee today announced that it would once again leave the federal funds rate unchanged at 5.25%-5.5%, adding that FOMC members do not expect it will be appropriate to reduce the target range until they have gained greater confidence that inflation is moving sustainably toward the Federal Reserve’s 2% target. The FOMC last year began hitting the pause button on a series of rate hikes that started in early 2022. Today’s decision marked the fifth that the committee has left the target range untouched.
During a news conference after the announcement, Federal Reserve Chairman Jerome Powell said that FOMC members believe that the rate is likely at its peak, and that if the economy evolves as expected, the committee can begin dialing back the rate at some point later this year.
“But the economy has surprised forecasters in many ways since the pandemic and ongoing progress toward our 2% inflation objective is not assured,” Powell said. “The economic outlook is uncertain, and we remain highly attentive to inflation risks. We are prepared to maintain the current target range for the federal funds rate for longer if appropriate.”
