The Federal Reserve Open Markets Committee has decided to maintain the current interest rates. This decision follows the recent release of data that indicated a surge in consumer prices.
According to a press release issued by the Federal Reserve Board on March 20, the interest rate on reserve balances will continue to stand at 5.4%. The target range for the federal funds rate also remains unaltered, at 5-1/4% to 5-1/2%.
The press release further indicates signs of robust economic growth. Despite persistent high inflation, there are indications that a decrease is imminent. The board also highlighted strong job gains and a low unemployment rate.
As per the press release, the committee plans to persistently reduce its holdings of Treasury securities, agency debt, and agency mortgage-backed securities in an effort to bring inflation back down to 2%.
A week prior to the Federal Reserve Board's decision, the Bureau of Labor Statistics (BLS) released its latest Consumer Price Index data. According to this BLS press release, the index for All Urban Consumers (CPI-U) rose by 0.4% in February, following a 0.3% increase in January. Over the past year, before seasonal adjustment, the all-items index grew by 3.2%. Consumers faced higher prices for items such as shelter, gasoline, and energy while food prices remained stable.