US Federal Reserve pauses interest rate cuts

The pause breaks a three-meeting streak of cuts dating back to September last year, when the Fed rolled out its first rate cut since March 2020.

Recent Fed indicators suggest US economic activity has continued to expand at a solid pace. Unemployment rate has stabilised at a low level in recent months and labour market conditions remain solid. Inflation remains somewhat elevated.

Fed chairman Jerome Powell has acknowledged that predicting inflation’s trajectory has become more challenging.

The Federal Open Market Committee (FOMC) seeks to achieve maximum employment and inflation at the rate of 2 per cent over the longer run, a Fed release said.

The Committee concluded that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain.

The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities.

ALCHEMPro News Desk (DS)