The Federal Reserve Open Market Committee met yesterday and determined that because of the strong labor market and solid economic activity, the interest rate will remain the same.
The FOMC issued a statement, explaining, ”On a 12-month basis, overall inflation and inflation for items other than food and energy have declined and are running below 2%. On balance, market-based measures of inflation compensation have remained low in recent months, and survey-based measures of longer-term inflation expectations are little changed.
Consistent with its statutory mandate, the committee seeks to foster maximum employment and price stability. In support of these goals, the committee decided to maintain the target range for the federal funds rate at 2.25% to 2.5%.”
The statement went on to say, “In light of global economic and financial developments and muted inflation pressures, the committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes.”
The Wall Street Journal reported that Fed Chairman Jerome Power told reporters, “Overall the economy continues on a healthy path, and the committee believes that the current stance of policy is appropriate.”
After the meeting he added, “We don’t see a strong case for moving [rates] in either direction.”