In a press release issued by the Federal Reserve, recent data suggests that the U.S. economy is growing at a modest pace, with robust job gains and a steady low unemployment rate. However, inflation remains elevated and continues to be a concern.
The Federal Reserve Committee, in its steadfast commitment to achieving maximum employment and returning inflation to the target 2 percent over the long term, announced that it will hold the target range for the federal funds rate at 5 to 5-1/4 percent. This decision allows the Committee time to assess additional data and its implications for monetary policy.
"The Committee is strongly committed to returning inflation to its 2 percent objective," reads the official statement. As part of the inflation control measures, the Committee will also continue to reduce its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as per its previously announced plans.
However, tighter credit conditions for households and businesses, which could dampen economic activity, employment, and inflation, are expected. The exact effects of these tighter conditions remain uncertain. The Committee remains highly attentive to the potential risks of inflation.
In determining further policy firming to control inflation, the Committee will consider the cumulative effects of monetary policy, the lags with which monetary policy affects economic activity and inflation, and overall economic and financial developments.
Assessing the suitable monetary policy stance, the Committee will continue to monitor incoming data's implications for the economic outlook. The group also stands prepared to adjust the policy as needed if risks emerge that could impede the Committee's objectives. This evaluation will consider a broad spectrum of data, including labor market conditions, inflation pressures and expectations, and financial and international developments.
The voting members for this monetary policy action included Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lisa D. Cook; Austan D. Goolsbee; Patrick Harker; Philip N. Jefferson; Neel Kashkari; Lorie K. Logan; and Christopher J. Waller.
According to the Federal Reserve, the U.S. banking system remains sound and resilient in the face of these economic conditions.