Fed Keeps Rates Unchanged at 5.5% for 8th Consecutive Meeting

The Federal Reserve kept interest rates unchanged for its 8th consecutive meeting, in line with market expectations.

The fed fixed on Wednesday the interest rate range between 5.50% and 5.75%.

The Federal Reserve stated in its statement that economic activity has continued to expand at a strong pace, but job gains have slowed while the unemployment rate has risen but remains low.

The Fed continued: “Inflation has declined over the past year but is still fairly high. In recent months, there has been some additional progress towards the inflation target set by the committee at 2%.”

According to the statement, the Monetary Policy Committee seeks to achieve maximum employment and inflation at a rate of 2% in the longer term, and believes that the risks that threaten the achievement of its goals related to employment and inflation are still moving towards a better balance.

The statement said: “When considering any adjustments to the target range for the federal funds rate, the Committee will carefully evaluate incoming data, evolving expectations, and the balance of risks.”

The statement stated that the Fed does not expect it to be appropriate to reduce the target range until it gains greater confidence that inflation is moving sustainably towards 2%. In addition, the committee will continue to reduce its holdings of Treasury securities, agency debt, and mortgage-backed securities.

Analysts believe that this confirmation will be the last, before the Federal Reserve begins the monetary easing cycle and begins reducing interest rates starting next September, if the economic data and inflation indicators for July and August support it.

Meantime, prices in the United States increased slightly in June, indicating an improvement in inflationary conditions, which contributes to creating conditions for the Federal Reserve to begin reducing interest rates in September.

Finally, the Commerce Department's Bureau of Economic Analysis said in a previous statement that the personal consumption expenditures price index (PCE) rose 0.1% last month after stabilizing in May. In the 12 months ending in June, the index jumped 2.5% after rising 2.6% in May.