‘Fed Holds Rates Steady as Inflation Ebbs’

by Safe Retirement Reports

The Federal Reserve has once again held steady the interest rates, signaling an ongoing commitment to monetary stability, even as inflation has cooled. This decision comes shortly after a string of disappointing economic reports, including a sharp decline in core inflation.

The Federal Open Market Committee (FOMC) voted unanimously to keep the target federal funds rate range at 1.00-1.25%. This marks the third consecutive month that the Fed has not raised or lowered interest rates in response to the most recent economic data. The decision was largely expected since inflation, which the central bank aims to keep stable at 2%, fell to 1.4% in October.

In a statement following the meeting, Federal Reserve Chairman Jerome Powell noted that while underlying trends in the economy are generally positive, recent inflation data suggest more gradual hikes in the future. He also pointed out that the current rate is expected to remain near its current level for some time, as inflation is now projected to remain subdued in 2018 and into 2019.

The decision also follows other recent signals from Powell that the central bank is content to pare back its rate hikes until inflation catches up. This could be a sign that the Fed is willing to be flexible in response to the financial markets and the current economic environment.

By refraining from further increasing the cost of borrowing, the Fed is helping to maintain the strength of the U.S. dollar and provide a buffer for the country’s economic growth. This decision should also be seen as an attempt to encourage businesses to make necessary investments in their technology, personnel, and products to remain competitive in the global marketplace.

The Federal Reserve’s decision to hold interest rates steady as inflation cools is an indication that the institution is in tune with the current economic climate and is doing what is necessary to ensure a stable economy. This should provide some reassurance to businesses and investors that the central bank is not overstepping its mandate of maintaining price stability.

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