The Federal Open Market Committee (FOMC) on Thursday held the federal funds target range steady at 4.25 percent to 4.5 percent, citing steady economic growth and lingering inflationary pressures.
Despite recent swings in net exports, the Fed noted that broader economic indicators continue to show momentum. A strong labor market and low unemployment rate, it said, highlight the ongoing resilience of the U.S. economy.
Federal Reserve Chair Jerome Powell said that future policy decisions will remain data-dependent, as the central bank stays focused on its dual mandate of maximum employment and price stability.
Powell pushed back against recent calls from President Donald Trump for an immediate rate cut, saying the current monetary policy stance allow them elbow room to timely respond to economic developments.
“For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policies,” Powell said at a press conference.
He acknowledged that inflation has eased since its peak in 2022 but remains above target. Current projections place the median inflation rate at 3 percent for 2025, declining to 2.4 percent in 2026 and 2.1 percent by 2027—still above the Fed’s 2 percent objective.
While uncertainty around the economic outlook has lessened, Powell cautioned that it remains “elevated,” citing global developments and financial market volatility as ongoing risks.
The Fed also reaffirmed its plan to continue reducing its balance sheet by trimming holdings of Treasury and mortgage-backed securities, aiming to gradually tighten financial conditions.
The central bank reiterated its readiness to adjust policy if risks emerge—whether from slowing growth or renewed inflation. Market participants are expected to remain focused on upcoming data releases for signs of future Fed moves.
