US Fed Reserve keeps interest rate unchanged at 5.25-5.5 pct
WASHINGTON, Nov 1 (KUNA) - The US Federal Reserve decided Wednesday to maintain the target range for the federal funds rate at 5.25-5.5 percent, for the second straight policy meeting, as the inflation rate remains high.
US Federal Reserve
In a press statement, the Federal Open Market Committee (FOMC), in charge of policy setting, said recent indicators suggest that economic activity has been expanding at a solid pace.
"Recent indicators suggest that economic activity expanded at a strong pace in the third quarter. Job gains have moderated since earlier in the year but remain strong, and the unemployment rate has remained low. Inflation remains elevated," reads the FOMC statement. It assessed that the US banking system is sound and resilient.
"Tighter financial and credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain," it pointed out.
The Committee said it remains highly attentive to inflation risks and seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run.
"In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. The Committee will continue to assess additional information and its implications for monetary policy," the FOMC stated.
In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee said it will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.
In addition, the Committee vowed to continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans.
"The Committee is strongly committed to returning inflation to its 2 percent objective," it affirmed.
Today's decision left open the possibility that the Federal Reserve's two-year rate hiking campaign may have reached its end. However, it did not rule out another rate hike this year.
"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. (end) asj.ibi.
