Federal Reserve Bank Chair Jerome Powell at the Federal Reserves' William McChesney Martin building. WASHINGTON: The Federal Reserve held interest rates steady on Wednesday and pushed out the start of rate cuts to perhaps as late as December as policymakers sketched out their view of an economy that remains virtually unchanged across its major dimensions for years to come.
The result is the Fed accepting a slow expected decline in inflation back towards its 2 per cent target, with the central bank's preferred inflation measure - the personal consumption expenditures price index - virtually unchanged at the end of this year from its current level and the number of rate cuts held to a single quarter-percentage-point reduction."We don't make decisions about future meetings until we get there," he said.
Powell himself said the decision about the rate path was a"close call" for many policymakers, and that to some degree the Fed had merely traded an earlier start to rate reductions this year by tacking an additional anticipated cut onto 2025. The weak CPI number for May was"only one reading," Powell said."When we are , then we can look at loosening policy."
"Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have remained strong, and the unemployment rate has remained low," the Fed said in its statement, which was approved unanimously.