WASHINGTON - In a move that continues to reflect its cautious approach to economic stability, the U.S. Federal Reserve has decided to maintain its benchmark lending rate unchanged for the second consecutive time.
According to Yonhap News Agency, the Federal Reserve, after concluding its two-day Federal Open Market Committee (FOMC) meeting on Wednesday, announced that it will hold the federal funds rate at the current range of 5.25 to 5.50 percent. This decision marks a steady course for the rate, which is at its highest in 22 years, as the central bank pursues its goal of reining in inflation to 2 percent.
The Fed had previously halted its rate increases in the September FOMC meeting, after initiating aggressive hikes in March the previous year in response to escalating inflation. The July meeting saw the rate raised by a quarter percentage point, bringing it to the present level.
In a subsequent press release, the Federal Reserve provided an overview of the U.S. economic climate, indicating a strong expansion of economic activity in the third quarter and noting that, despite a moderation in job gains, employment figures remained robust with a low unemployment rate.
However, the Fed's statement also emphasized a continued vigilance towards inflation risks and suggested that adjustments to monetary policy may be forthcoming to ensure the attainment of its goals, including "maximum" employment and price stability.
Jerome Powell, the Federal Reserve Chair, in a press conference, made it clear that the committee is not contemplating rate reductions. Powell's remarks underscored the Fed's commitment to achieving a policy stance capable of bringing down inflation to the targeted 2 percent sustainably before considering any rate cuts.
The Federal Reserve's next meeting, set for December 12-13, will be closely watched for any changes to the benchmark rate, with current indications suggesting a continuation of the present rate.
This latest stance by the Fed has implications for the global financial landscape, widening the interest rate differential with South Korea to as much as 2 percentage points, potentially impacting financial markets and economic decisions in the Asian country.