Federal Reserve Holds Steady on Interest Rates

Washington – The Federal Reserve’s Federal Open Market Committee (FOMC) voted Wednesday to hold steady the federal funds rate, remaining in a target range of 5.25% to 5.5%. Officials cited continued progress towards the committee's 2% inflation objective.

The FOMC noted in a statement that recent economic indicators suggest solid growth. Job gains have remained strong, and the unemployment rate has stayed low. Inflation has decreased over the past year but remains above the 2% target.

Committee members stated that they will continue to assess incoming data, the evolution of the economic outlook, and the balance of risks. The FOMC is prepared to adjust the stance of monetary policy as needed, should risks emerge that could impede attaining the dual mandate objectives of maximum employment and price stability.

"In determining the extent of any additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments," the FOMC statement read.

The FOMC seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. To support these goals, the committee will continue to reduce its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Doing so will continue as previously announced.

Wednesday’s vote was unanimous.