The Federal Open Market Committee announced today that it will hold the target range for the federal funds at 4.25%-4.5%. Eleven voting FOMC members voted in favor of the motion but Fed Governor Christopher Waller voted against it. Waller favored maintaining the range at its current level but opposed the FOMC’s decision to also slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $25 billion to $5 billion.
The FOMC lowered the federal funds rate by 25 basis points during its December 2024 meeting but has held it steady since. In a statement, the FOMC the unemployment rate has stabilized at a low level in recent months and labor market conditions remain solid, but inflation remains somewhat elevated.
