Fed holds rates steady, citing inflation target

The Federal Open Market Committee voted to hold target interest rates steady, citing a solid expansion of economic activity and inflation uncertainty.

Rate Decision: In its policy statement, the FOMC said it would keep the federal funds rate at a range of 5.25-5.50% and doesn’t expect cuts until it has greater confidence that inflation is moving sustainably toward its 2% target.

Powell Remarks: Federal Reserve Chair Jerome Powell said during a news conference that rate cuts would likely be appropriate this year, but the Fed is prepared to hold steady if appropriate. In its December economic outlook, the Fed projected three quarter-point rate reductions this year.

Consensus Statement: The FOMC also unanimously reaffirmed its “Statement on Longer-Run Goals and Monetary Policy Strategy,” also known as the consensus statement, which articulates the panel’s approach to monetary policy.