The Fed keeps interest rates unchanged
The US Federal Reverse held a meeting on Wednesday to announce that interest rates would remain unchanged, and hinted that they had no intention to adjust interest rates in the near future. Earlier, U.S. President Trump called on the Fed to cut interest rates by one percentage point and take measures to stimulate the economy.
Fed Chairman Jerome Powell said the Fed do not see a strong case for the interest rate to move in either direction. The policy statement stated that the current economic situation in the United States is good and the chances of rising inflation are still high, but the current inflation level is still below the target of 2%, and the decline in inflation rate may last longer than expected. The current core inflation rate in the United States is 1.6%. However, Powell believes that the decline on core inflation is temporary, and the inflation rate will rebound to the 2% target.
Low inflation allows the central bank to be patient in deciding any further changes to its overnight benchmark lending rate. The overnight benchmark lending rate is currently at a range of 2.25-2.5%.
The Fed also lowered the bank excess reserve rate from 2.4% to 2.35%, with the goal of maintaining the federal funds rate within the target range.