Powell-led FOMC holds rates steady at 5.25-5.50%, cuts Treasury cap to $25 billion
US Fed Meeting Outcome highlights: The US Federal Reserve announced its interest rate decision today after a two-day Federal Open Market Committee (FOMC) meeting, leaving the benchmark interest rates unchanged at 5.25 per cent – 5.50 per cent for for the sixth straight meeting, in line with Wall Street estimates.
The rate-setting panel ended its third policy-setting meeting of the year on May 1 and unanimously voted to hold the policy rate at the 23-year high mark, and said ‘’there has been a lack of further progress toward the Committee’s two per cent inflation objective.”
The US Central bank added that it ‘’does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward two per cent.” This indicates that rate cuts are not on cards anytime soon, until inflation cools down and moves sustainably towards the two per cent target set by the US Fed.
After raising the policy rate by 5.25 percentage points since March of 2022 in one of the swiftest Fed reactions to rising price pressures, the central bank has now kept the policy rate on hold since July 2023 to anchor in high inflation.
