Federal Reserve Holds Steady: No Change in Interest Rates Amid Strong Economy

The US Federal Reserve is keeping its key interest rate unchanged at 4.25% to 4.5%, assessing the economy's strength amid inflationary pressures. Despite solid growth and stable unemployment, the Fed plans a measured policy approach to reach its inflation target, following a five-year policy review.


Devdiscourse News Desk | Updated: 30-01-2025 09:56 IST | Created: 30-01-2025 09:56 IST
Federal Reserve Holds Steady: No Change in Interest Rates Amid Strong Economy
Federal Reserve, Chair, Jerome Powell (Photo/@federalreserve). Image Credit: ANI
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The United States Federal Reserve has opted to maintain its current interest rate, keeping the federal funds rate at a stable 4.25% to 4.5%. This decision reflects a careful evaluation of an economy that, despite facing some inflationary challenges, continues to demonstrate robustness.

Federal Reserve Chair Jerome Powell, speaking post the Federal Open Market Committee meeting, highlighted the notable reduction in inflation over the past 24 months. However, he acknowledged that it still slightly surpasses the central bank's preferred 2% benchmark. The economy is advancing steadily, bolstered by resilient consumer expenditure, though there are signals of slowing investment in specific sectors like equipment and housing.

Powell emphasized that while wage growth is stabilizing—a sign of easing pressure in labor dynamics—the Federal Reserve remains vigilant. "We are not in a rush to alter our stance," Powell stated, announcing their strategic choice to hold the rate steady. The Fed commits to evaluating its dual mandate of maximizing employment and stabilizing prices, aiming to reduce inflation to the 2% objective over time. Their approach includes a comprehensive five-year policy review to adapt strategies effectively.

(With inputs from agencies.)

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