The US Federal Reserve held interest rates at 4.25%-4.5% at its Federal Open Market Committee meeting yesterday (30 January 2025).
The decision to hold, which was largely expected by the broader market, comes as US inflation remains 90 basis points above target at 2.9%, alongside the US economy remaining at close to full employment.
Daniela Sabin Hathorn, senior market analyst at Capital.com, said the FOMC’s accompanying statement “once again defended a hawkish stance” with the absence of “any reference about inflation making progress towards the 2% target”.
“It also notes that economic activity has continued to expand at a solid pace while the unemployment rate has stabilised at low levels,” she explained. “While the central bank notes it is attentive to risks to both sides of its dual mandate, the vote to leave rates unchanged was unanimous, suggesting the current pause in rates will likely be extended…
