Key points of the Federal Reserve's decision to maintain interest rates at a two-decade high
- On July 31, the Federal Open Market Committee (FOMC) of the United States unanimously voted to keep the benchmark interest rate unchanged in the target range of 5.25%-5.5%, reaching a new high in over twenty years. This is the eighth consecutive meeting where the committee has maintained the status quo.
- The statement adjusted its wording, stating that "the FOMC is attentive to the risks posed by its dual mandate," whereas previously officials were "highly concerned about inflation risks."
- The statement reiterated previous wording, stating that the FOMC does not expect to cut interest rates "until it has greater confidence that inflation will move towards 2%."
- The Fed also adjusted its wording, noting that price pressures are still "a bit" high and acknowledging that the inflation target "has made some further progress," whereas the previous statement mentioned "moderate further progress."
- Officials also adjusted their assessment of the labor market, stating that job growth "has slowed" and the unemployment rate "has risen but remains low."
- The statement pointed out that the risks of achieving employment and inflation goals "continue to tend towards a better balance."
- The decision was unanimously passed for the 17th consecutive meeting.
- Market reaction: U.S. Treasury yields edged up slightly after the release of the Fed's decision statement, gold prices slightly retraced gains, and U.S. stocks remained on the rise