With inflation still high, the US Federal Reserve keeps interest rates on hold

New Delhi: The US Federal Open Market Committee (FOMC) has decided to maintain the current interest rate in the range of 5.25% to 5.50% at the end of a two-day meeting and there is a possibility of only one rate cut in 2024.

The committee acknowledged that the pace of achieving the two percent inflation target has slowed. Addressing a press conference after the meeting, Federal Reserve Chairman Jerome Powell said the Fed remains cautious about cutting interest rates even though inflation has fallen from its highest level.

He stressed that the Fed is not yet ready to cut interest rates. The employment situation in the US is strong and inflation is falling but still above target. The FOMC has reduced its expectation of three interest rate cuts this year to just one.

Powell also said that the labor market is balanced with a low unemployment rate. It is not appropriate to cut interest rates until inflation comes down.