The Federal Reserve Board’s Federal Open Market Committee (FOMC) voted Wednesday to leave the target range for the federal funds rate unchanged at 4.25% to 4.50%, citing solid economic growth and a still-elevated inflation outlook.
“Recent indicators suggest that economic activity has continued to expand at a solid pace,” the Fed said in a statement following the vote. “The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated.”
While the central bank acknowledged that uncertainty about the economic outlook has diminished, it emphasized that risks remain. As a result, officials said they would continue to monitor a broad range of data before making any decisions about future rate changes.
“In considering the extent and timing of additional 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 statement read. The Fed also reiterated its commitment to reducing its balance sheet, continuing the runoff of Treasury securities and agency debt and mortgage-backed securities.
Despite holding rates steady, the FOMC left the door open to future policy shifts depending on how the economy evolves.
“The Committee would be prepared to adjust the stance of monetary policy as appropriate, if risks emerge that could impede the attainment of the Committee’s goals,” the statement said, noting that officials remain focused on achieving both maximum employment and a long-run inflation rate of 2%.
The vote to maintain the current rate range was unanimous, with all 12 voting members — including Fed Chairman Jerome Powell and Vice Chairman John Williams — supporting the decision.
Widening Divide
Prior to the FOMC vote, President Trump in an appearance at the White House again slammed Powell and inactivity on rates from the Fed.
“So, we have a stupid person, frankly, at the Fed — he probably won’t cut today. Europe had 10 cuts, and we had none,” the President said. He contended the U.S. is “going to lose” because the Fed is too late with cuts, restating his nickname for the Fed Chairman, “Too Late Powell.”
President Trump went so far as to jokingly suggest he ought to be running things at the Fed.
“Maybe I should go to the Fed. Am I allowed to appoint myself?” the President quipped. “I’d do a much better job than these people.” He said the federal funds rate “should be 2 points lower; it’d be nice to be 2.5 points lower.”
Meanwhile, should the Fed make any move to cut rates, it tends to do so by 25 basis points — an eighth or a tenth of what the President called for. President Trump and other administration officials have been calling out Powell and the Fed on (the lack of) rate cuts for months.
