The U.S. Federal Reserve Keeps Interest Rates Unchanged as Powell Reaffirms Commitment to Monitoring Inflation and Economic Developments

The U.S. Federal Reserve has kept interest rates unchanged, reaffirming its commitment to monitoring inflation and economic developments to ensure market stability.

Contents

The Federal Reserve
Jerome Powell
Interest Rates

The Federal Reserve

At the conclusion of its January meeting, the Federal Reserve decided to keep interest rates within the range of 4.25% to 4.50%,
aligning with market expectations after a series of rate cuts in previous meetings.
The Fed explained that this decision was based on economic data indicating slowing inflation nearing the official target,
along with continued labor market strength.

The statement issued by the Federal Open Market Committee (FOMC) emphasized that the U.S. economy continues to grow at a solid pace,
with the unemployment rate remaining at low levels.
However, inflation remains above the target, prompting the Fed to maintain its tight monetary policy to ensure financial stability and bring inflation back to the 2% target.

Jerome Powell

Powell’s Statements: A Balanced Approach and Flexible Monetary Policy

During the press conference following the meeting, Federal Reserve Chair Jerome Powell emphasized that the U.S. economy remains strong and that the labor market remains stable despite high interest rates.
He stated that the current monetary policy is not in a hurry to ease,
and the Fed is prepared to keep interest rates elevated if inflation remains above target for an extended period.

Powell mentioned that the FOMC discussed the impact of recent rate cuts,
highlighting that the U.S. GDP grew by more than 2% in 2024,
while consumer spending increased by 2.6% over the 12 months ending in December.
He also noted that the labor market is not exerting inflationary pressure,
with the overall assessment pointing to market stability and a balance of economic risks.

Regarding future monetary policy, Powell stated that the Fed will rely on economic data to determine the interest rate trajectory,
adding that the review of the central bank’s monetary policy framework will be completed by late summer.
He emphasized that future policy adjustments will depend on macroeconomic developments,
inflation trends, and labor market conditions.

Interest Rates

The Future of Interest Rates and Fed Policy

Powell addressed journalists’ questions, stressing that the Fed does not follow a pre-determined path for interest rates,
but will instead adjust its policy based on economic data.
He noted that long-term inflation expectations remain stable and that the Fed is ready to take flexible measures to ensure economic stability. He also mentioned that the Federal Reserve will monitor the impact of any changes in trade policies or tariffs on inflation and the U.S. economy.

Powell concluded by reiterating that the U.S. economy is in a strong position
and that the Fed will not lower interest rates until it is confident that inflation is sustainably approaching the target level.
He also emphasized that the Fed intends to reduce the size of its balance sheet,
stating that the current economic situation is not comparable to the 2008 crisis, as the U.S. economy is now more resilient.

The U.S. Federal Reserve Keeps Interest Rates Unchanged

The U.S. Federal Reserve Keeps Interest Rates Unchanged

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