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US Fed keeps key interest rates steady at 5.25 - 5.50% for sixth straight meet
US Federal Reserve Governor Jerome Powell (Photo courtesy: wikipedia.org)

US Fed keeps key interest rates steady at 5.25 - 5.50% for sixth straight meet

| @indiablooms | 02 May 2024, 03:00 am

Washington: The US Federal Reserve maintained interest rates at 5.25 percent - 5.50 percent on Wednesday for the sixth consecutive meeting, aligning with market expectations.

Following a two-day Federal Open Market Committee (FOMC) meeting, the US central bank announced its decision, noting "a lack of further progress toward the committee's two percent inflation objective."

"The FOMC does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably towards 2 percent," the Fed said.

The FOMC indicated that it continues to lean towards potential reductions in borrowing costs, but has raised concerns about recent disappointing inflation figures.

It has hinted at a potential halt in progress towards achieving greater balance in the economy.

The US Federal Reserve stated that risks related to meeting employment and inflation targets "have moved toward better balance over the past year," a departure from its previous statement in March which stated they "are moving into better balance."

"In considering any adjustments to the target range for the federal funds rate, the committee will carefully assess incoming data, the evolving outlook, and the balance of risks. 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 two percent,'' said the FOMC in its unanimously-approved policy statement.

The US Federal Reserve also declared a reduction in the speed at which it is reducing its balance sheet, effective June 1.

It will now permit only $25 billion in Treasury bonds to be phased out each month, down from the previous $60 billion. The runoff of mortgage-backed securities will persist, with up to $35 billion monthly.

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