PT Solid Gold Berjangka | Fed keeps rates steady as it notes ‘lack of further progress’ on inflation
Fiskal The Fed Ekonomi AS Fiskal & Moneter PT SGB Solid Gold Berjangka Solid Group SG Berjangka
Solid Gold Berjangka | The Federal Reserve’s decision to maintain its benchmark short-term borrowing rate comes as no surprise, given the ongoing battle with inflation. The rate remains at a targeted range between 5.25% and 5%, where it has been since July 2023. This decision reflects the Fed’s commitment to addressing inflation, which has become increasingly challenging.
While interest rates were unchanged, the Federal Open Market Committee (FOMC) did adjust the pace of reducing bond holdings on the central bank’s balance sheet, signaling a slight easing of monetary policy.
In its post-meeting statement, the FOMC acknowledged the persistent inflationary pressures, stating a “lack of further progress” in returning inflation to its 2% target. The committee emphasized the need for greater confidence in sustained inflation movement before considering rate reductions.
Additionally, the statement noted a nuanced shift in the characterization of progress toward the dual mandate of stable prices and full employment. While economic growth was described as solid, with strong job gains and low unemployment, the risks associated with achieving both mandates were seen as moving toward better balance over the past year.
Regarding the balance sheet, the committee announced a slowdown in the pace of allowing maturing bond proceeds to roll off without reinvestment, starting in June.
Overall, the Fed’s decision reflects a cautious approach to monetary policy amid lingering inflation concerns, balancing the need for price stability with supporting economic growth and employment.