Fed Leaves Interest Rates Unchanged

The Fed decided at a meeting Wednesday to keep interest rates unchanged, ending a campaign it had previously begun to give more time to read the data further and understand how much impact previous lifting rounds have had on the U.S. economy.

Today’s decision to keep federal funds interest in a range of 5.25% to 5.5%, the same level the bank reached in July, and the last time interest rates, which reaches a 22-year high, has been raised.

The confirmation decision came after the bank raised federal funding interest 11 times since March 2022, raising interest on mortgage loans to their highest levels in decades.

Federal Reserve officials have been unanimous that fixing interest rates this month is the right move, with some of them confirming that the Fed could re-rending rates in September, CNN reported.

Financial markets are currently stabilising on a 69% consensus that the Fed is likely to continue to stabilise in November, according to CME Fedwatch’s tool to monitor Fed’s movements.

Inflation levels and labour markets showed a regular slowdown last year, giving the Fed enough room to stabilise interest rates and wait for more data.

Although volatility in energy markets continues, inflation is expected to continue to slow over the next few months, mostly due to falling car prices and housing rentals.

These factors contribute to officials with sufficient assurance that they can stabilise interest rates without risking any rate increases.

U.S. central bank officials made the decision to stabilise interest rates last time in June, when uncertainty came out of control over the extent of banks’ reluctance to provide loans in response to the banking crisis that erupted last spring.

When it became clear that the economy had not been hurt by those disruptions, the Fed decided to raise interest rates in July.