New Delhi [India], August 1 : The Federal Reserve, in its latest meeting, decided to keep the federal funds rate unchanged at 5.25 per cent to 5.5 per cent for the eighth time. In its statement, the Fed observed that job gains in the U.S. economy have moderated, while the unemployment rate has increased slightly but remains low.
"In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 per cent," the Fed announced on Wednesday.
The Fed also noted that recent data indicates economic activity in the U.S. has continued to expand at a solid pace. The committee reaffirmed its commitment to achieving maximum employment and a long-term inflation rate of 2 per cent. It believes that the risks to reaching these goals are becoming more balanced. However, the economic outlook remains uncertain, and the committee is vigilant about the risks to both sides of its dual mandate.
Looking ahead, the committee emphasized that it will carefully assess incoming data, evolving economic conditions, and the balance of risks.
The Fed stated, "The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 per cent."
Additionally, the Fed added it will continue to reduce its holdings of treasury securities, agency debt, and agency mortgage-backed securities.
The Fed reiterated its commitment to returning inflation to its 2 per cent objective. The committee added it will keep monitoring a wide range of information, including labour market conditions, inflation pressures and expectations, and financial and international developments, to determine the appropriate stance of monetary policy.
"The Committee's assessments will take into account a wide range of information, including readings on labour market conditions, inflation pressures and inflation expectations, and financial and international developments," said Fed.
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