The Federal Open Market Committee (FOMC) agreed to maintain the current target range for the federal funds rate between 5.25 to 5.5% during its two-day meeting that ended Wednesday.
The committee’s statement concluded it “does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%” but the “economic outlook is uncertain” and the committee “remains highly attentive to inflation risks.”
“The FOMC’s January statement was noncommittal, highlighting the wide gap between hawks and doves on the Committee,” said America’s Credit Unions’ Curt Long. “While the majority of changes to the statement were dovish, including the elimination of language indicating a tightening bias and the acknowledgement that risks to full employment are growing, there was also the significant inclusion that any reductions in the fed funds rate will require ‘greater confidence’ in the trajectory for inflation. Rate cuts are coming, but it is clear that hawks are not ready to concede just yet, and as a result May is a more likely candidate than March for the first cut.”
The FOMC will next meet March 19-20.