The US Federal Reserve declared its decision on interest rates today following a two-day Federal Open Market Committee (FOMC) meeting, opting to maintain the benchmark rates at 5.25 percent to 5.50 percent for the sixth consecutive meeting. This decision aligns with estimates from Wall Street.
The rate-setting committee concluded its third policy-setting meeting of the year on May 1 and unanimously decided to keep the policy rate at its 23-year high level. The committee noted that “there has been a lack of further progress toward the Committee’s two percent inflation objective.”
The US central bank further stated 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 suggests that rate cuts are unlikely in the near future, unless inflation subsides and consistently moves closer to the two percent target established by the US Fed.
After raising the policy rate by 5.25 percentage points since March 2022, in one of the swiftest responses to mounting price pressures, the central bank has maintained the policy rate since July 2023 to stabilize high inflation.
