Fed Leaves Rates Unchanged

WASHINGTON, DC - DECEMBER 06: Federal Reserve Board Chairman Jerome Powell speaks during a Rural Housing Assistance Council Awards Reception, on December 6, 2018 in Washington, DC. (Photo by Mark Wilson/Getty Images)
Mark Wilson/Getty Images

The Federal Reserve left its overnight interest rate target unchanged at a range of 1.50 to 1.75 percent.

The Fed announced its interest rate decision in a statement issued Wednesday at the conclusion of its two-day monetary policy meeting. The decision marks the second consecutive meeting in which the Fed left rates unchanged after three cuts in 2019.

President Donald Trump has urged the Fed to reconsider its current holding pattern on rates, pointing out that the U.S. target is much higher than rates in developed economies in Europe and Japan, where rate targets are negative.

The Federal Open Market Committee, which sets monetary policy for the United States, left its assessment of the economy and its policy little changed compared with the statement issued in December.

“Information received since the Federal Open Market Committee met in December indicates that the labor market remains strong and that economic activity has been rising at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low,” the Fed said. “Although household spending has been rising at a moderate pace, business fixed investment and exports remain weak.”

Last month’s statement said household spending was rising at “a strong pace.” The new description of “moderate pace” appears to be a slight downgrade.

The decision to keep rates unchanged was was unanimous.

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