Fed Keeps Interest Rates Unchanged Amid High Inflation

The US central bank again said it would keep interest rates unchanged, noting a “lack of further progress” toward lowering inflation.

The decision left the Federal Reserve’s key rate hovering at the highest level in more than two decades, in the range of 5.25 per cent to 5.5 per cent, where it has stood since last July.

By keeping borrowing costs high, the Fed is hoping to cool the economy and reduce the pressures pushing up prices.

But with inflation in the US proving more persistent than expected, the bank is facing questions about its next move.

Analysts who had expected the bank to start cutting rates early this year have been forced to postpone forecasts – and some have even raised the possibility of a rate rise.

At a press conference following the announcement, Fed chairman Jerome Powell said he thought that a rate increase was unlikely, while repeating that officials wanted greater confidence that inflation was easing before moving to cut.

He said it really will depend on the data.