WASHINGTON–As expected, the Federal Reserve Board has adjourned from two days of meetings here by opting to keep rates where they are currently set.
The Fed indicated it still has concerns around inflation, even as it has succeeded in bringing down the rate of inflation to its target rate of 2%. Analysts had forecast that uncertainty surrounding President Trump’s tariffs and their effect on inflation would limit the Federal Open Market Committee from making any move.
“Recent indicators suggest that economic activity has continued to expand at a solid pace,” the Fed said in a statement at the conclusion of its meeting. “The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid. Inflation remains somewhat elevated.
The Objective
“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run,” the Fed statement continued. “Uncertainty around the economic outlook has increased. The Committee is attentive to the risks to both sides of its dual mandate.”
As a result, the Fed has maintained its target range for the federal funds rate between 4.25% and 4.50%.
Separately, the Fed said it will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities.
“Beginning in April, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $25 billion to $5 billion,” it said. “The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2% objective.”
How Votes Were Cast
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Susan M. Collins; Lisa D. Cook; Austan D. Goolsbee; Philip N. Jefferson; Adriana D. Kugler; Alberto G. Musalem; and Jeffrey R. Schmid.
Voting against this action was Christopher J. Waller, who supported no change for the federal funds target range but preferred to continue the current pace of decline in securities holdings, the Fed said.
