Federal Reserve Holds Federal Funds Rate Steady

On Wednesday, the Federal Reserve’s Federal Open Market Committee (FOMC) voted unanimously to maintain the target range for the federal funds rate at 3.5–3.75%.

The Committee also reaffirmed its policy of maintaining ample reserves in the banking system.

The FOMC said economic activity is expanding at a solid pace despite elevated uncertainty, due in part to the conflict in the Middle East. Productivity growth and capital investment remain strong, job gains have kept pace with the workforce, and the unemployment rate has changed little.

Inflation remains elevated relative to the Committee’s 2% goal, partly reflecting supply shocks that have driven price increases in some sectors, including energy. The FOMC said it “will deliver price stability.”