The U.S. Federal Reserve announced a pause in interest rate hikes after three consecutive cuts, keeping its key policy rate in the 3.50 % to 3.75 % range as of Wednesday.
The decision was not unanimous. Chairman Jerome Powell and the majority of the FOMC members voted for the pause, while Stephen Miran – who had also urged a quicker easing in the last two meetings – and Christopher Waller both opposed the cut. Waller joined Miran this time, signalling a minority view against further tightening.
In a joint statement, the Fed said recent data indicated that the economy was expanding at a solid pace, employment gains remained modest, and the unemployment rate showed signs of stabilising. Inflation, however, remained somewhat elevated.
The Fed reiterated that it remains ready to adjust its monetary stance “if risks emerge that could impede the committee’s goals”. It will take into account a wide array of information, including labour‑market conditions, inflationary pressures and expectations, as well as financial and global developments.
Central bankers generally view high rates as a tool to dampen inflation, but they also recognise that such rates can negatively impact equity markets and economic investment. Conversely, rates that are too low can feed further inflationary pressure.
