Fed Holds Rates Steady in 4.25%- 4.50% Range

• The Federal Reserve held interest rates steady on Wednesday and gave little insight into when further reductions in borrowing costs may take place in an economy where inflation remains above target, growth continues, and the unemployment rate is low.
• After several months in which inflation data have largely moved sideways, the U.S. central bank dropped from its latest policy statement language saying that inflation "has made progress" towards the Fed's 2% inflation goal, noting only that the pace of price increases "remains elevated."
• Recent key inflation readings remain about half a percentage point or more above the Fed's target. Fed officials say they largely believe the progress in lowering inflation will resume this year but have now put rates on hold as they await data to confirm it.
• The unanimous decision to keep the overnight interest rate in the current 4.25%-4.50% range, coupled with the new statement, puts the Fed in a holding pattern as officials await further inflation and jobs data and clarity on the impact of President Donald Trump's policies.
• The decision to hold the policy rate steady was widely anticipated following three consecutive rate cuts in 2024 that reduced the Fed's benchmark rate by a full percentage point.

(Source: Reuters)