The Federal Reserve announced Wednesday that it would hold its benchmark interest rate steady, citing encouraging signs that inflation is moving closer to its 2% target without triggering a significant rise in unemployment.
The decision was unanimous among Federal Open Market Committee members, marking the third consecutive meeting without a rate change. Fed Chair Jerome Powell signaled that the central bank is watching economic data carefully before making any moves.
“The labor market remains solid, and inflation has eased substantially from its peak. We believe the current stance of monetary policy is appropriate,” Powell said at a press conference following the announcement.
Markets responded positively to the news, with the S&P 500 gaining 1.2% and the Nasdaq rising 1.5% on the day. Bond yields fell as investors interpreted the statement as a signal that rate cuts could come before year-end.
Economists are divided on the timing of the first rate cut, with some projecting September and others pointing to December as more likely.
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