The Federal Reserve maintained its benchmark interest rate steady at its latest FOMC meeting, citing concerns over the nation’s economic outlook despite steady growth and low unemployment.
According to the Fed, recent indicators suggest that economic activity moderated in the first half of the year, with inflation remaining above the 2% target. However, the economy remains solid, with a stronger-than-expected 3% growth rate between April and June.
Federal Reserve Chair Jerome Powell signaled that most FOMC members voted in favor of maintaining the current rate due to inflation concerns. Powell also emphasized the risks associated with lowering rates given the potential impact of tariffs on economic growth and inflation.
Economists currently predict a 63% likelihood of a rate cut at the next meeting on September 16-17, but Powell remained cautious, stating that the decision will be based on data released between now and the central bank’s next meeting. The Fed will assess two monthly job reports from the Department of Labor and two additional months’ of CPI data to inform its decision.
The rate cut is seen as a possibility if there are concerns about the economic and labor market outlook, with some economists predicting that inflation could accelerate over the next few months. However, for now, the Fed remains committed to keeping rates steady amidst uncertainty over the nation’s economic outlook.
Source: https://www.cbsnews.com/news/federal-reserve-meeting-today-fed-fomc-interest-rate-trump-powell