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U.S. Federal Reserve Holds Policy Interest Rate Steady
(MENAFN) The US Federal Reserve announced Wednesday it would maintain its benchmark interest rate within the 3.5%-3.75% corridor, meeting widespread market predictions and halting a trio of consecutive reductions.
The decision breaks a cutting streak that began in September 2025, following five straight meetings where policymakers kept rates steady before initiating downward adjustments.
Central bank officials characterized current economic expansion as proceeding at a "solid" pace based on incoming indicators, according to the statement.
"Job gains have remained low, and the unemployment rate has shown some signs of stabilization," the monetary authority stated, noting price pressures remain "somewhat" elevated.
The Federal Open Market Committee (FOMC), the Fed's rate-setting body, continues pursuing its congressional mandates of full employment alongside 2% long-term inflation, officials reiterated.
"Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate," policymakers stressed.
Future policy adjustments will depend on a "carefully" monitored assessment of fresh economic data, shifting forecasts, and risk evaluations, the Fed indicated regarding potential changes to its target corridor.
The rate hold received backing from 10 of 12 governors, while Stephen Miran and Christopher Waller dissented in favor of a 25-basis-point reduction.
Recent employment data has painted a varied picture. The Fed's twin objectives—maximum job creation and price stability—guide all monetary policy determinations.
Hiring momentum has gradually strengthened in recent months following a late-2025 slowdown.
December nonfarm payrolls climbed by 50,000, with November adding 56,000 positions, as joblessness declined to 4.4%.
Price inflation, measured by the consumer price index (CPI), advanced 2.7% year-over-year in December while rising 0.3% from the previous month—both figures aligned with analyst projections.
The rate decision arrives amid ongoing public attacks from US President Donald Trump targeting Fed Chair Jerome Powell, whom he has accused of excessive caution as economic threats intensify, alongside his interference attempts with the Fed's Board of Governors. Trump stated last month he will "probably" initiate legal action against Powell.
Trump has persistently called for immediate rate cuts, pointing to European central bank policies, and cautioned that hesitation risks derailing American economic growth.
Resisting political interference, the Fed maintained elevated rates throughout most of last year before commencing its easing cycle as labor market conditions deteriorated.
Policymakers held rates at a historically elevated 5.5% spanning July 2023 through September 2024 before progressively reducing them to 4.5% by December 2024.
The decision breaks a cutting streak that began in September 2025, following five straight meetings where policymakers kept rates steady before initiating downward adjustments.
Central bank officials characterized current economic expansion as proceeding at a "solid" pace based on incoming indicators, according to the statement.
"Job gains have remained low, and the unemployment rate has shown some signs of stabilization," the monetary authority stated, noting price pressures remain "somewhat" elevated.
The Federal Open Market Committee (FOMC), the Fed's rate-setting body, continues pursuing its congressional mandates of full employment alongside 2% long-term inflation, officials reiterated.
"Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate," policymakers stressed.
Future policy adjustments will depend on a "carefully" monitored assessment of fresh economic data, shifting forecasts, and risk evaluations, the Fed indicated regarding potential changes to its target corridor.
The rate hold received backing from 10 of 12 governors, while Stephen Miran and Christopher Waller dissented in favor of a 25-basis-point reduction.
Recent employment data has painted a varied picture. The Fed's twin objectives—maximum job creation and price stability—guide all monetary policy determinations.
Hiring momentum has gradually strengthened in recent months following a late-2025 slowdown.
December nonfarm payrolls climbed by 50,000, with November adding 56,000 positions, as joblessness declined to 4.4%.
Price inflation, measured by the consumer price index (CPI), advanced 2.7% year-over-year in December while rising 0.3% from the previous month—both figures aligned with analyst projections.
The rate decision arrives amid ongoing public attacks from US President Donald Trump targeting Fed Chair Jerome Powell, whom he has accused of excessive caution as economic threats intensify, alongside his interference attempts with the Fed's Board of Governors. Trump stated last month he will "probably" initiate legal action against Powell.
Trump has persistently called for immediate rate cuts, pointing to European central bank policies, and cautioned that hesitation risks derailing American economic growth.
Resisting political interference, the Fed maintained elevated rates throughout most of last year before commencing its easing cycle as labor market conditions deteriorated.
Policymakers held rates at a historically elevated 5.5% spanning July 2023 through September 2024 before progressively reducing them to 4.5% by December 2024.
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