The Federal Reserve keeps interest rates at 5.5% for the seventh consecutive meeting in July

The United States Federal Reserve (Fed) has decided not to change its monetary policy in July, leaving interest rates in a range of 5.25%-5.5% for the seventh consecutive meetingtoThe entity has not changed its rates for a year, when in July 2023 it decided to raise them by 25 basis points to the highest in recent decades.

Fed Statement

Recent indicators suggest that economic activity has continued to expand at a solid pace. Wages have moderated and the unemployment rate has increased but remains low. Inflation has moderated over the past year but remains somewhat elevated. In recent months, there has been some further progress toward the Committee’s 2% inflation objective..

The Committee seeks to achieve maximum employment and inflation at a rate of 2 percent over the longer term. The Committee believes that the risks to achieving its employment and inflation goals remain balanced. The economic outlook is uncertain, and the Committee remains alert to risks to both sides of its dual mandate.

In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 5.25 to 5.5 percent. In considering any adjustment to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee does not believe it is appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.In addition, the Committee will continue to reduce its holdings of Treasury securities, agency debt, and agency mortgage-backed securities. The Committee is firmly committed to returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the achievement of the Committee’s objectives. The Committee’s assessments will take into account a broad range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting in favor of the monetary policy action were Chairman Jerome H. Powell; Vice Chairman John C. Williams; Thomas I. Barkin; Michael S. Barr; Raphael W. Bostic; Michelle W. Bowman; Lisa D. Cook; Mary C. Daly; Austan D. Goolsbee; Philip N. Jefferson; Adriana D. Kugler; and Christopher J. Waller. Austan D. Goolsbee voted as an alternate member at this meeting.