The U.S. Federal Reserve decided to maintain its benchmark interest rate at a 22-year high for the second time in a row during a monetary policy meeting on Wednesday, in an effort to bring inflation down to its target of 2 percent.
The two-day Federal Open Market Committee (FOMC) meeting resulted in the decision to keep the rate between 5.25 and 5.50 percent. The central bank, however, left the door open to making a change later, in order to reach “maximum” employment and its inflation goal.
The previous FOMC meeting in September saw the bank freeze the rate, the second pause in its rate-hiking campaign that began in March last year. In the July FOMC meeting, the rate was raised by a quarter percentage point to the current level.
The Fed released a statement assessing the overall U.S. economic conditions, noting that “recent indicators suggest that economic activity expanded at a strong pace in the third quarter. Job gains have moderated since earlier in the year but remain strong, and the unemployment rate has stayed low.”
The committee also expressed its “high attentiveness” to inflation risks, while leaving open the possibility of future monetary policy adjustment.
At a press conference, Fed Chair Jerome Powell said the committee is not considering rate cuts “at all.” He added that the committee is still focused on the question of “have we achieved a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2 percent over time sustainably?”
It is uncertain if the Fed will continue to keep the benchmark rate unchanged during the next FOMC meeting scheduled for December 12-13.
The latest Fed rate freeze put the gap between the key rates of South Korea and the United States at up to 2 percentage points.
This file photo, taken March 13, 2015, shows the Federal Reserve's headquarters in Washington, D.C. (Yonhap)