In its announcement and the subsequent news conference, the Federal Reserve Chairman highlighted that recent indicators point to steady economic expansion, with the unemployment rate stabilizing at a low level in recent months and labor market conditions remaining robust. However, inflation remains somewhat elevated.
The Committee aims to achieve maximum employment and maintain inflation at 2 percent over the long term. It currently views the risks to its employment and inflation objectives as roughly balanced but acknowledges the uncertainty of the economic outlook and remains vigilant to risks affecting its dual mandate.
To support these goals, the Committee decided to maintain the target range for the federal funds rate at 4.25% to 4.5%. When considering future adjustments to this range, it will closely evaluate incoming economic data, evolving conditions, and the balance of risks. The Committee will also continue reducing its holdings of Treasury securities, agency debt, and agency mortgage-backed securities. It remains firmly committed to fostering maximum employment and bringing inflation back to its 2 percent target.
In determining the appropriate stance of monetary policy, the Committee will carefully monitor how new information affects the economic outlook. It stands ready to adjust its policies if emerging risks threaten its objectives. Its assessments will be guided by a broad range of data, including labor market performance, inflation pressures and expectations, and domestic and global financial developments.
https://www.federalreserve.gov/newsevents/pressreleases/monetary20250129a.htm
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Warren Gerow is an independent investment wealth consultant to Sightline Wealth Management.
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