Fed keeps rates unchanged and reiterates inflation commitment

The Fed kept the target range for the federal funds rate unchanged at 5.25%-5.50% for the eighth consecutive time and said it would not cut rates until it had greater confidence in inflation, while keeping an eye on inflation and employment risks.

Recent indicators show that economic activity continues to expand steadily. Although job growth has slowed and the unemployment rate has risen, it remains low. Inflation has eased over the past year but remains slightly above target. In recent months, the Fed has made some progress toward its 2% inflation target.

The Fed is committed to achieving maximum employment and 2% inflation over the long term. The Fed believes that the risks to achieving these goals are balanced. The economic outlook is uncertain and the Fed is concerned about the risks to its dual mandate.

To support its goals, the Fed decided to maintain the target range for the federal funds rate between 5.25% and 5.5%. In considering any adjustments to the target range, the Fed will carefully evaluate new data, the changing outlook, and the balance of risks. The Fed does not believe it would be appropriate to lower the target range unless confidence in the continued achievement of inflation toward the 2% target increases. In addition, the Fed will continue to reduce its holdings of Treasury securities, agency debt, and agency mortgage-backed securities. The Fed remains firmly committed to returning inflation to its 2% objective.

In assessing the appropriate monetary policy stance, the Fed will continue to monitor the implications of emerging information for the economic outlook. If risks emerge that could impede the achievement of its goals, the Fed will be prepared to adjust the stance of monetary policy as appropriate. The Fed's assessment will take into account a wide range of information, including labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for this monetary policy action were: Chairman Jerome Powell, Vice Chairman John Williams, Thomas Barkin, Michael Barr, Raphael Bostic, Michelle Bowman, Lisa Cook, Mary Daly, Austan Goolsbee, Philip Jefferson, Adriana Kugler, and Christopher Waller. Austan Goolsbee voted as an alternate member at this meeting.