Southeast Asia Information Port News (www.dnyxxg.com) – The U.S. Federal Reserve announced on the 28th that it would maintain the target range for the federal funds rate at 3.5% to 3.75%. This decision follows three consecutive rate cuts and is in line with market expectations.
The Fed issued a statement after its two-day monetary policy meeting, stating that current indicators suggest that U.S. economic activity is expanding solidly. Job growth remains slow, the unemployment rate has shown signs of stabilizing, and inflation remains high. The Fed seeks to achieve its goals of maximum employment and 2 percent inflation over an extended period. Uncertainty about the economic outlook remains high. The Fed is closely monitoring the risks to its dual mandate.
The statement said that to achieve its goals, the Fed decided to maintain the target range for the federal funds rate at 3.5% to 3.75%. In considering the magnitude and timing of further interest rate adjustments, the Fed will carefully assess the latest data, the evolving outlook, and the balance of risks.
The statement mentioned that among the 12 people who participated in the vote on the interest rate decision, Federal Reserve Governors Stephen Milan and Christopher Waller voted against it, advocating a 25 basis point rate cut.
Federal Reserve Chairman Jerome Powell stated at the press conference following the monetary policy meeting that the labor market may be stabilizing, and both upside risks to inflation and downside risks to employment have diminished. Current interest rates are in an appropriate range. Regarding consumer sentiment, he pointed out that although surveys showed a pessimistic outlook, actual consumption remained resilient, and there was a disconnect between consumer confidence and actual consumption performance. Overall, the foundation for economic growth remains solid.
When asked about the appointment of the next Federal Reserve Chairman, Powell stated that the Fed's independence is extremely important. He advised his successor to remain separate from politics and to clarify that the Fed's accountability channel lies with Congress. He said that the Fed staff is a highly professional team, and no one is more dedicated to the public good than them.
On the same day, the three major U.S. stock indices showed mixed results but remained stable. Bloomberg reported that the Federal Reserve described economic activity as a "solid expansion" in its statement and removed the phrase "downside risks to employment have increased," indicating an improved assessment of the U.S. economic situation. Powell emphasized a stabilizing labor market and appropriate interest rates at the press conference, and this change in wording reassured the market.
The Wall Street Journal reported that Fed officials are relatively optimistic about inflation, and if the labor market does not weaken further, the likelihood of another rate cut in the short term is limited. The next rate cut may be postponed until after Powell's term as Fed chairman ends in May. (End)
