ECONOMY
Federal Reserve Holds Interest Rates Steady For Fourth Straight Meeting
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The Federal Reserve on Wednesday announced it was holding its benchmark interest rate steady for the fourth straight time, but signaled that further rate hikes are unlikely.
The central bank maintained the target range for the federal funds rate at 5.25% to 5.5%, a 22-year high, after a series of aggressive hikes since 2022 to combat inflation.
The U.S. economy added 216,000 jobs in December, a significant increase over November, as the labor market remains strong and unemployment remains low despite high interest rates.
The Consumer Price Index ticked up slightly in December, thanks largely to higher energy and housing costs, but the core CPI, which excludes more volatile food and energy prices, increased just 0.3% in December, unchanged from November, and 3.9% for the year, down slightly from 4% in November.
The Federal Open Market Committee in December predicted it would lower its key interest rate by three-quarters of a point in 2024, indicating three typical cuts of a quarter point each, but this month was not the time.
Federal Reserve Chair Jerome Powell said at a press conference Wednesday a cut would also be unlikely after the next meeting in March.
“Based on the meeting today, I would tell you that I dont think its likely that the committee will reach a level of confidence by the time of the March meeting to identify March as the time to do that. But thats to be seen,” Powell said.
In December, Powell said the prospect of a so-called soft landing, bringing inflation back down to 2% without a significant spike in unemployment, is still uncertain.
“This result is not guaranteed, Powell said at the time. It is far too early to declare victory.
On Wednesday, Powell declined to confirm whether the Fed would commit to a series of three rate cuts once it makes the first cut, saying it would depend on the data.
TMX contributed to this article.
