Fed holds interest rates steady despite Trump’s mounting pressure for lower rates
Federal Reserve holds interest rates steady
- The US Federal Reserve maintained its benchmark interest rate at 3.50%-3.75% on Wednesday, citing persistent inflation and robust economic expansion.
- The decision was made with a 10-2 vote, with Governors Christopher Waller and Stephen Miran dissenting, both favouring a quarter-percentage-point rate cut.
- The Fed's statement offered no indication of when future borrowing cost reductions might occur, stating that adjustments would depend on incoming data and the broader economic outlook.
- Policymakers noted that inflation 'remains somewhat elevated' despite the job market showing 'some signs of stabilization', with the unemployment rate standing at 4.4% in December.
- Divisions within the Federal Open Market Committee persist regarding the balance between controlling inflation and stimulating the economy, a debate expected to influence the initial weeks of the next Fed Chair's term.