The Federal Reserve’s Open Market Committee (FOMC) has voted to keep interest rates unchanged for the time being. The committee said on March 18 that available indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained low, and the unemployment rate has been little changed in recent months. Inflation remains somewhat elevated. The fOMC especially pointed to the situation in the Middle East, which has become somewhat unpredictable because of the war with Iran that President Trump started more than two weeks ago.
The FOMC said it still wants to achieve maximum employment and inflation at the rate of 2% over the longer run.
‘Uncertainty about the economic outlook remains elevated. The implications of developments in the Middle East for the U.S. economy are uncertain. The Committee is attentive to the risks to both sides of its dual mandate,” the FOMC said.
The Fed decided to maintain the target range for the federal funds rate at 3‑1/2% to 3‑3/4%.
The committee said that it will continue to monitor the implications of incoming information for the economic outlook.It said it would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the committee’s goals. It said it would take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
Only one member of the FOMC voted against holding interest rates steady. He was Trump-appointed Stephen I. Miran, who wanted to lower the target range for the federal funds rate by 1/4% at this meeting.
