The Federal Reserve (Fed) kept the benchmark interest rate unchanged at 3.50–3.75% at its first Federal Open Market Committee (FOMC) meeting held on the 17th under the leadership of new Chair Kevin Warsh.
The Fed announced that it unanimously decided to maintain the rate at this level during the regular FOMC meeting that concluded on the day. This marks the fourth consecutive time the benchmark rate has frozen.
After cutting the rate by 0.25 percentage points three consecutive times in September, October, and December of last year, the Fed has kept rates frozen in January, March, and April of this year.
In a statement, the Fed said, “Inflation remains high relative to the Committee’s 2% target, partly reflecting supply shocks caused by price increases in certain sectors such as energy,” adding that “the Committee will achieve price stability.”
Of the 18 people who submitted year-end benchmark interest rate forecasts, nine predicted a rate hike. This is interpreted as suggesting the possibility of one rate hike within the year. One person did not submit a forecast. It appears to be Chair Wash, who is reluctant to provide a forecast.
The growth rate of the U.S. economy (real gross domestic product) this year was projected at 2.2%. This is 0.2 percentage points lower than last March.