The Federal Reserve made the anticipated announcement on Wednesday that it would be keeping interest rates unchanged. This decision has been made in order to allow the organization to preserve its target range for the federal funds rate between 5.25 to 5.50 percent; it serves the dual objective of maintaining maximum employment as well as achieving a 2 percent inflation rate over a prolonged period.
Although inflation has shown signs of decreasing over the past year, it continues to remain high which led to the Federal Reserve's decision of leaving rates unperturbed. The bank delineated the economic progress as stable and mentioned that even though there has been a moderation of job gains since early the previous year, the numbers are still holding strong.
Interestingly, the statement by the Fed did not include any references to potential further adjustments in the policy. However, it added that it would only be appropriate for the interest rates to be lowered if there is a notable build-up of confidence pointing towards a consistent move of the inflation towards the target of 2 percent.
Any fluctuations in the target range for the federal funds rate will be closely evaluated based on the incoming data, outlook shift, and risk balance, the central bank assured. The next assembly to discuss the monetary policy has been slated for March 19-20. According to current indications from CME Group's FedWatch Tool, there's a 52.8 percent chance that there will be no change in the rates and a 45.8 percent chance that there will be a 25 basis point rate cut.
Expectations for a rate cut in March have dwindled recently, as many economists now predict that the Federal Reserve will likely wait until May to initiate rate reductions.
