The Federal Reserve held rates steady, at the central bank’s first meeting of the year.
“Economic activity has been expanding at a solid pace,” a policy statement released by the Fed board said. “Job gains have remained low, and the unemployment rate has shown some signs of stabilization. Inflation remains somewhat elevated.”
Here’s what else to know about the decision:
Rates unchanged: The Fed’s benchmark interest rates remain in a range of 3.5 percent to 3.75 percent. The central bank had cut rates by a quarter-point in each of its previous three meetings.
Two governors voted to cut: Stephen I. Miran, whom President Trump appointed to the Fed late last year, once again issued a dissent and voted in favor of a quarter-point cut. He was joined by the Fed governor Christopher J. Waller, who also voted for a quarter-point cut. Mr. Waller was appointed by Mr. Trump during the president’s first term in office and is among the contenders to be the next Fed chair.
Statement reflects economic strength: The statement says economic activity has been expanding at a “solid pace” — an upgrade from the “moderate” pace in December — and Fed officials noted that the unemployment rate has shown “some signs of stabilization,” after previously saying it had been edging up.
A resilient economy: Jerome H. Powell, the Fed chair, sounded relatively optimistic about the economy, saying at a post-meeting news conference that “the economy has once again surprised us with its strength, not for the first time.”
Powell addresses Supreme Court case: When asked why he decided to attend the Supreme Court hearing on whether Lisa D. Cook, a Fed governor, could be fired by the president, Mr. Powell called it the “most important legal case in the Fed’s 113-year history.” He added that “it might be hard to explain why I didn’t attend.” His presence at the hearing was criticized by Treasury Secretary Scott Bessent.
What comes next: Mr. Powell said officials were not taking any moves off the table and that, if the labor market were to weaken considerably, they would consider cutting. Alternatively, if inflation picked up without labor market deterioration, rates could increase, although Mr. Powell noted that “it isn’t anybody’s base case” that “the next move will be a rate hike.”
- Credits: The New York Times
- Author: Ana Swanson
