Fed announces it will keep interest rates at 5.25% to 5.5% as rate of inflation remains above target of 2%
by Lauren Aratani
The Guardian
The Federal Reserve announced on Wednesday that it is holding interest rates steady at 5.25% to 5.5%, their highest level in two decades, as inflation continues to dog the US economy.
Though some had hoped the Fed would soon cut interest rates, which are at their highest level since 2007, the annual rate of inflation has stubbornly remained above 3%. The Fed’s target rate is 2%.
“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%,” the Fed said in a statement that was largely unchanged from its statement after its previous meeting in March, when it also kept rates steady. “The committee will carefully assess incoming data, the evolving outlook, and the balance of risks.”