Arab Finance: The US Federal Reserve held interest rates unchanged, maintaining the target range between 4.25% and 4.5%, as per by the Federal Open Market Committee’s (FOMC) statement.
“Although swings in net exports continue to affect the data, recent indicators suggest that growth of economic activity moderated in the first half of the year,” the FOMC commented.
“The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated.”
Both Michelle Bowman and Christopher Waller voted against the decision, calling for lowering the target range for the federal funds rate by 1/4 percentage point
On his part, Fed Chair Jerome Powell revealed that the committee hadn’t yet determined whether it would cut rates at its September meeting.
“We have made no decisions about September,” Powell said. “We don’t do that in advance. We’ll be taking that information into consideration and all the other information we get as we make our decision.”
During his speech at a news conference, he elaborated that the central bank is monitoring the potential impact of tariffs on inflation.
“Our obligation is to keep longer-term inflation expectations well anchored and to prevent a one-time increase in the price level from becoming an ongoing inflation problem,” he added.