- The US Federal Reserve kept benchmark rates at 3.5–3.75% after its recent FOMC meeting
- Economic activity is expanding solidly, with job gains low and unemployment stabilising, it noted
- Inflation remains somewhat elevated, prompting caution in future monetary policy moves
The US Federal Reserve held the benchmark lending rates in the range of 3.5–3.75%, as it underlined its positive view towards the economy. "Available indicators suggest that economic activity has been expanding at a solid pace," it said in a release issued at the conclusion of the Federal Reserve Open Market Committee (FOMC) meeting on Wednesday.
"In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals," it said.
Presently, job gains have remained low, and the unemployment rate has "shown some signs of stabilisation", the FOMC said. However, inflation remains somewhat elevated, it added.
The Fed decision of holding rates was not unanimous, as Governors Stephen Miran and Christopher Waller were in favour of lowering the rates. The majority of FOMC members, led by Chair Jerome Powell voted in favour of maintaining the status quo.
The FOMC meeting came days after Powell was warned of criminal investigation by the US Department of Justice, over the case linked to renovation of Federal Reserve buildings. The outgoing Fed chief, who is due to retire in May, has been at loggerheads with US President Donald Trump over the rate cut path to be adopted by the monetary policy body.
Despite Trump aggressively pushing for lower rates, Powell has maintained restraint. He paused the rates for much of 2025, and only resumed the rate cut cycle after nine months in September.
After three successive rate cuts—in September, October and December 2025—speculations were rife that the Fed will hold rates as weekly jobless claims tumbled to around 200,000, whereas inflation stayed steady at 2.7% in December.
"The committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run. Uncertainty about the economic outlook remains elevated. The committee is attentive to the risks to both sides of its dual mandate," FOMC said in its statement.
The rate-setting panel said it will be prepared to "adjust the stance of monetary policy as appropriate if risks emerge" that could impede the attainment of its goals. This assessment 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, it added.
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