US Federal Reserve holds interest rates steady

08 May '25

1 min read

US Federal Reserve holds interest rates steady

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Insights

US Fed has kept the federal funds rate steady at 4.25 to 4.50 per cent, citing strong economic growth and a stable labour market.
However, it flagged persistent inflation and rising uncertainty.
The Fed reaffirmed its commitment to its 2 per cent inflation target and will continue reducing its balance sheet.
Future rate moves will depend on incoming data and evolving economic risks, the FOMC said.

US Federal Reserve has announced it will maintain the federal funds rate target range at 4.25 to 4.50 per cent. The Federal Open Market Committee (FOMC) cited continued solid economic expansion and a strong labour market, though it acknowledged that inflation remains somewhat elevated and uncertainty around the economic outlook has grown.

While the unemployment rate has held steady at low levels, the Fed expressed concern over rising risks to both employment and inflation—its dual mandate. The Committee reaffirmed its commitment to achieving maximum employment and returning inflation to its long-run target of 2 per cent, the FOMC said in a statement.

The Fed will continue to reduce its balance sheet by paring holdings of Treasury securities and mortgage-backed assets. Officials signalled that future rate decisions will depend on incoming data and an evolving assessment of risks.

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