“We are likely at or near the peak rate for this cycle,” Fed Chair Jerome Powell said at a press conference following the announcement.
After its last rate hike in July to a range of 5.25 to 5.5 percent, the central bank has been content to sit back and monitor signs of strong progress in its fight against inflation.
The pause was widely expected by financial and economic experts as inflation continues to fall but remains above the Fed’s 2 percent annual growth target.
“Inflation has eased from its highs and this has come without a significant increase in unemployment. That’s very good news. But inflation is still too high,” Powell said, adding “the path forward is uncertain.”
High interest rates tend to cool economic growth and spending that can drive up prices, but the Fed is facing calls to cut those rates before borrowing costs take too steep a toll on the economy.
While Powell declined to lay out any kind of rate cut schedule during his press conference, all but 3 Federal Open Market Committee members expect at least two rate cuts next year, according to economic projections released Wednesday.
As the Fed closely watches new inflation, economic growth and unemployment figures, there’s one data point the Fed won’t be factoring into its next move: the presidential election.
When asked if the Fed would front load rate cuts during an election year, Powell said, “We don’t think about political events, we don’t think about politics, we think about what’s the right thing to do for the economy.”
The Hill’s Sylvan Lane and Taylor Giorno have more here.
