Federal Reserve Maintains Status Quo: Keeps Interest Rates Unchanged in Third Consecutive Policy Meeting


The Federal Reserve kept interest rates constant at a policy-setting committee meeting on Wednesday, in a largely anticipated decision that retains the federal funds rate target range at 5.25-5.50%.

It was the Federal Open Market Committee’s third consecutive meeting in which the central bank voted not to raise rates as it tightens monetary policy to combat inflation. The most recent rise, which capped a string of 11 increases since March 2022, occurred in July.

While the Fed has made substantial headway in containing inflation without undermining economic growth, keeping the balance is difficult. If the Fed tightens monetary policy too much or keeps interest rates too high for too long, the US economy may enter a recession.

Although recent drops in gasoline prices are encouraging for the Fed, the central bank’s effort to reduce inflation to its 2% target is far from complete. In November, headline inflation fell marginally, dropping to a 3.1% annual pace. However, the core consumer price index, which excludes the costs of food and energy, revealed that price rise quickened in October and remained stable at 4% year on year.

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