(Finance) – The Federal Open Market Committee (FOMC) of the Federal Reserve he decided to maintain the target range for the federal funds rate between 5.25% and 5.5%as expected by the market. In considering any rate adjustments, the FOMC will carefully assess “incoming data, the evolving outlook, and the balance of risks,” the statement released at the end of the meeting reads.
The Fed believes that “it will not be appropriate to reduce the target range until it has acquired greater confidence that inflation is moving sustainably toward 2%“. It will also continue to reduce its holdings of Treasuries, agency debt, and agency mortgage-backed securities. The FOMC is “firmly committed to returning inflation to its 2% objective.”
Central bankers say they are ready to adjust the monetary policy stance appropriately if risks emerge that could prevent the achievement of the objectives. The assessments will take into account “a wide range of informationincluding readings on labor market conditions, inflationary pressures and inflation expectations, as well as financial and international developments.”
Looking at the situation in the United States, the Fed says that recent indicators suggest that economic activity has continued to expand at a strong pace. Job growth has moderated and the unemployment rate has increased but remains low. Theinflation has eased in the last year, but remains “rather high”. Further progress has been made toward the FOMC’s 2% inflation target in recent months.
The FOMC seeks to achieve maximum employment and inflation at a long-term rate of 2%. It also believes that the risks to achieving the employment and inflation targets “continue to reach better balance.” The economic outlook is “uncertain” and the FOMC is “mindful of the risks for both sides of his dual mandate“.