Liz Kiesche,
William_Potter
- The Federal Reserve kept its policy interest rate unchanged at 5.25%-5.50% for a fourth straight meeting, as widely expected, against a backdrop of steadily receding inflation. Still, the rate of inflation remains elevated enough that it’s not ready to reduce the federal funds rate target range, the central bank said.
- While the Federal Open Market Committee removed its tightening bias from its statement, it’s in no rush to cut rates. “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 statement said.
- The FOMC also reminded market participants that it’s continuing its restrictive policy by continuing with quantitative tightening through shrinking its holdings of Treasury securities, agency debt, and agency mortgage-backed securities.
- The central bankers observed that economic activity has been “expanding at a solid pace,” and job gains, though moderating, remain strong. In addition, the unemployment rate remains low. The vote on today’s decision was a unanimous one.
- After the decision, equity markets took a leg down. The Nasdaq fell 1.5%, the S&P 500 -1.0%, and the Dow, which had been vascillating between green and red, edged down 0.2%. The U.S. 10-year Treasury yield perked up slightly to 3.99% in afternoon trading.
- Fed Chair Jerome Powell will comment further on the decision at his post-meeting press conference at 2:30 PM ET.
- Developing… check back for updates.
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