US Fed's FOMC decides to keep interest rates unchanged
02 May 24 2 min read
Insights
- The US Federal Reserve's Federal Open Market Committee has decided to keep interest rates unchanged, highlighting inflation concerns and an 'uncertain' economic outlook.
- The target range for the federal funds rate was kept at 5.25-5.5 per cent.
- The risks to achieving the employment and inflation goals have moved towards better balance over the past year.
Recent indicators suggest that economic activity has continued to expand at a solid pace, job gains have remained strong and the unemployment rate has remained low, an FOMC statement said.
“In recent months, there has been a lack of further progress toward the committee's 2 per cent inflation objective,” it noted.
However, the risks to achieving the FOMC’s employment and inflation goals have moved towards better balance over the past year, the committee concluded.
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The committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 per cent.
In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities.
Beginning in June, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
Fibre2Fashion News Desk (DS)
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