Fed leaves rates unchanged

WASHINGTON:The Federal Reserve held interest rates steady on Wednesday, with Chair Jerome Powell saying the US economy remains solid and risks to inflation and employment have diminished, though they have not disappeared.
Policymakers voted 10–2 to keep the benchmark rate in the 3.50%–3.75% range following a two-day meeting. Powell said the Fed is “well-positioned” to assess whether further rate cuts will be needed, adding that any move would depend on incoming data, particularly signs of weakening in the labor market or renewed progress toward the 2% inflation target.
“The economy has once again surprised us with its strength,” Powell said, noting that inflation remains “somewhat elevated” but that job market conditions are stabilizing.
Governors Christopher Waller and Stephen Miran dissented, favoring a quarter-point rate cut.
Since the Fed’s last meeting in December, when it delivered its third consecutive rate cut, officials believe upside risks to inflation and downside risks to employment have eased. Inflation remains about one percentage point above target, partly due to tariffs imposed last year, though Powell said their impact should fade by mid-2026.
Markets reacted modestly, with major US stock indexes closing largely flat and Treasury yields little changed. Futures markets are pricing in a potential rate cut at the Fed’s June meeting.— Reuters