“Federal Reserve Holds Firm on Interest Rates as Inflation Cools

The Federal Reserve recently announced that it is keeping the key federal rate steady as the economy continues to remain at low levels while inflation has cooled off significantly. The decision, announced after a two-day meeting of Federal Reserve policymakers, marks the sixth consecutive month that the Federal Reserve has left rates unchanged. The Federal Reserve’s decision to keep interest rates steady indicates that it is taking the slow and steady approach to economic growth. With inflation slowing down, the central bank appears confident that gradual increases in the federal rate will help bolster economic growth without stifling it with too much inflation. Inflation, which had been rising steadily since the middle of last year, has dropped off significantly, which has allowed the Federal Reserve to maintain low interest rates. This has helped buoy consumer spending, as well as support business and investment activities. The Federal Reserve has also noted that despite the recent slow-down in economic activity, the overall outlook for the economy is still positive. The steady employment rate, along with wage growth and consumer spending, indicate that the economy is still in a good position going forward. Additionally, the Federal Reserve is keeping an eye on markets both domestically and internationally. Increased risk of trade wars, geopolitical uncertainty and slower global growth could all weigh on economic activity. Overall, the Federal Reserve’s decision to keep interest rates steady appears to be driven by its cautious approach to the economy. With inflation cooling off and a solid outlook for the future, the central bank appears to be in no hurry to raise rates just yet.