Federal Reserve Holds Interest Rates Steady in Chairman Powells Final Meeting

US Federal Reserve Keeps Interest Rates Steady Amid Global Economic Uncertainty

The US Federal Reserve has maintained interest rates at 3.5-3.75 percent, as announced on Wednesday following its two-day policy meeting led by Fed Chair Jerome Powell. The decision was largely in line with economists’ expectations.

According to CME FedWatch, which tracks monetary policy decisions, there was a 100% expectation that the central bank would maintain rates. Eight officials voted to keep rates steady, while three dissented in favor of removing the reference to a future cut, and one official, Stephen Miran, dissented in favor of an immediate rate cut.

The decision comes amid concerns over inflationary pressures on oil markets and a stagnant labor market. The Fed stated that developments in the Middle East are contributing to uncertainty about the economic outlook. Inflation is elevated, partly due to recent increases in global energy prices.

On Wednesday, US crude oil rose 7.31 percent to $107.24 a barrel, while Brent reached its highest point since 2022 at $119.34. Petrol prices continue to climb, with the average price for a gallon being $4.22, according to the American Automobile Association.

The central bank also noted that job gains have remained low, and the unemployment rate has changed little in recent months. The most recent Job Openings and Labor Turnover Survey showed little change in both the number of job openings and the number of people leaving their positions.

Fed Chair Jerome Powell stated that a good part of the slowing pace of job growth over the past year reflects a decline in labor force participation due to lower immigration and labor force participation. He also noted that other indicators, including job openings, layoffs, hiring, and nominal wage growth, generally show little change in recent months.

The decision to maintain rates comes as Kevin Warsh, Trump’s replacement to succeed Jerome Powell, was confirmed by the Senate Banking Committee on Wednesday.

Source: Al Jazeera