Federal Reserve Keeps Interest Rate Level
TEHRAN (Tasnim) – The US Federal Reserve’s Open Market Committee, which oversees securities markets, convened on Wednesday for the first time in two months, leaving onlookers curious if the bank would decide to raise interest rates once again amid a renewed, albeit slight, rise in inflation.
Federal Reserve Chair Jerome Powell announced the central bank would "maintain" the effective federal funds rate (EFFR), also called its interest rate, at its present level of 5.25-5.5%, Sputnik reported.
Powell said inflation was “well above” the Fed’s goal but noted it had “moderated somewhat” since last year, adding that the prospect of getting inflation below 2% still had “a long way to go.”
He added that the Fed expects interest rates to rise another 25 points to 5.5-5.75% by the end of the year, and that by the end of 2025, it would likely fall to around 3.9%.
Ahead of the meeting, the US business media reported that there was “virtually no chance” the Fed would raise interest rates at the September meeting.
“There’s likely to be a pause here, but a clear possibility that the November meeting is, as they say, a live meeting. I don’t think they’re ready to say, ‘We are now done,’” Roger Ferguson, a former vice chair of the Fed, told one US outlet earlier this week.
Powell said the FOMC was aware its current fiscal policy was “restrictive” on economic activity and that the economy “faces headwinds," all of which figured into its Wednesday decision.