Federal Reserve Leaves Interest Rates Unchanged Again
The Federal Reserve has decided to keep its key interest rate unchanged once again. The FED has now maintained its key monetary policy rate steadily at a 23-year high.
The much awaited data now reveals that the FED is taking a cautious approach to monetary policy despite recent signs of cooling inflation. This is also the eighth consecutive time the FED has paused interest rates.
Key points:
- The Federal Reserve kept its key interest rate steady once again.
- The FED announced its decision after the conclusion of the two-day meeting on Wednesday.
- Traders were expecting evidence that could lead to rate cuts in September.
- FED maintained rates to curb rising inflation.
FED moves against market expectations, keeps rates unchanged
While the market was expecting a rate cut as inflation was slowly easing, the central bank has been cautious in its policy decisions.
The inflation rate has plunged from around 9% in June 2022 to above 3% in 2023. However, inflation dropped to the 2% range in June.
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Fed Chair Jerome Powell also stated earlier in July to the lawmakers that “We are well aware that we now face two-sided risks.”
The statement comes after the Labor Department June jobs report, which highlighted that the unemployment rate has seen a slight surge to 4.1%.
The report also showed that it was the first time the unemployment rate surged past the 4% level.
