'Strong' economic activity prompts Fed to hold rates for fifth time

‘Uncertain’ economic outlook

The Federal Reserve’s Open Market Committee (FOMC) decided to hold rates at 5.25%-5.5% yesterday (20 March), due to “strong” economic activity in the US.

The committee noted job gains have been strong, with the unemployment rate remaining low, and while inflation has eased over the past year, it "remains elevated" at 3.2%. Hotter than expected US inflation fails to soften June rate cut hopes Over the long run, the FOMC said it aims to achieve a maximum employment and inflation rate of 2% and, although these goals are "moving into better balance", the committee argued the economic outlook is "uncertain" and the central bank remains "highly attentive" to inflation risks. The decision to hold rates was in line with market expectations ...