US Federal Reserve Keeps Interest Rates Unchanged, Declares Decision 'Unanimous'

 

US Federal Reserve Keeps Interest Rates Unchanged, Declares Decision 'Unanimous'

The US Federal Reserve decided to maintain interest rates at their current levels, citing a "unanimous" decision and highlighting concerns about persistent inflation and an uncertain economic outlook.

In its first significant policy move under President Donald Trump's second term, the Federal Reserve announced that interest rates would remain in the 4.25-4.50% range, acknowledging that inflation is still "somewhat elevated" and the economic forecast remains uncertain.

The move is expected to create some tension between the central bank and the newly inaugurated president, who has expressed a desire for more influence over Fed policy.

The Fed noted that economic activity continues to expand at a solid pace, while the labor market remains stable with low unemployment. However, the central bank also revised its language from its December statement, removing the claim that inflation had made progress toward the 2% target.

The decision was made unanimously, with all 12 Federal Reserve officials agreeing to keep rates steady. Notably, Cleveland Fed President Beth Hammack, who had dissented last month, did not participate in this meeting as he is serving as an alternate voter for the remainder of the year.

The Fed’s stance comes amid economic turbulence in the US, partly influenced by China's DeepSeek, which has affected the US market and led to losses for major corporations such as Nvidia.

Despite inflation readings remaining above the target, the Federal Reserve expressed optimism that progress in reducing inflation would continue this year. As such, the central bank is holding rates steady while awaiting further data to inform future decisions.

"In considering future adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks," the Federal Open Market Committee (FOMC) said in its statement.

Following the Fed's announcement, short-term interest rate futures indicated that investors expect the central bank to delay any further rate cuts until June. Meanwhile, US bond yields remained mostly unchanged, and stocks saw slight declines.

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