US Fed maintains target range for federal funds rate at 5.25-5.5%

Recent indicators suggest that growth of economic activity has slowed from its strong pace in the third quarter this year.

Job gains have moderated since earlier in the year but remain strong, and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated, the Fed said in a release.

“Overall, the development of the labour market has been very positive. It’s been a good time for workers to find jobs and get solid wage increases.” Fed chair Jerome Powell told a press conference.

Though the US banking system is sound and resilient, tighter financial and credit conditions for households and businesses are likely to weigh on economic activity, hiring and inflation, the Fed noted.

The extent of these effects, however, remains uncertain, it said.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 per cent over the longer run.

Fed policymakers also signalled that they expect to make three quarter-point cuts to their benchmark interest rate next year.

ALCHEMPro News Desk (DS)