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Fed leaves rates unchanged for fifth straight meeting
The target range stayed at 3.50% to 3.75%, while 76% of traders in CME data expect a rate hike in September.
The U.S. Federal Reserve left interest rates unchanged for a fifth consecutive meeting following a two-day FOMC session, keeping the benchmark federal funds rate within a 3.50% to 3.75% target range. According to LiveMint Markets, policymakers said they were waiting for clearer signals on the inflation outlook and the broader economic trajectory before changing policy. The Fed also reported that economic activity is expanding at a solid pace, with job gains keeping pace with workforce growth and the unemployment rate roughly unchanged from the June meeting, while noting elevated uncertainty tied in part to the conflict in the Middle East.
On inflation, the Fed said price pressures remain above its 2% goal, citing supply shocks that have pushed up prices in some sectors, including energy. The central bank reiterated its commitment to restoring price stability after inflation has stayed above target for an extended period, and it said its assessment remains largely unchanged from the June meeting.
While most participants voted to keep rates steady, three of 12 policymakers dissented and urged a 25-basis-point increase at this meeting, preferring to raise the target range by 1/4 percentage point. LiveMint Markets also noted that traders saw a 33% chance of a hike before the decision, and CME data pointed to 76% expecting a rate increase in September.