- By Aditya Pratap Singh
- Thu, 08 May 2025 08:55 AM (IST)
- Source:JND
The US Federal Reserve kept the interest rates unchanged at 4.25 per cent to 4.50 per cent, as the risks of both higher unemployment and rising inflation have increased. After examining the most recent economic data, the Federal Open Market Committee (FOMC) made the decision at its local meeting on Wednesday.
The Fed, in a statement, said, "The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen. In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 per cent."
It also pointed out that, despite data impacted by shifts in net exports, recent indicators point to the US economy continuing to expand at a strong rate. The unemployment rate has remained low in recent months, indicating that the job market is still robust.
Inflation is still above the Fed's target of 2%, though, and is still fairly high.
The Fed chose not to alter the federal funds rate at this time in order to support these objectives. Additionally, the Committee stated that it will keep lowering the amount of Treasury and mortgage-backed securities it owns. In order to determine when and how to modify interest rates in the future, the Fed stated that it will closely monitor fresh economic data. Depending on the state of the economy, the central bank is prepared to alter its policy if necessary.
When making decisions in the future, the Fed will take into account a number of variables, including global developments, financial markets, inflation trends, and labor market conditions. The decision was approved by every Committee member, including Vice Chair John Williams and Fed Chair Jerome Powell. Neel Kashkari attended this meeting as an alternate member.
The Fed further stated that it is still dedicated to maintaining a robust labor market and bringing inflation down to 2%. As it observes how the economy develops, it is currently remaining stable.
(With Inputs From ANI)