Federal Reserve Resolution Full Text: Keeping Interest Rates Unchanged, Increased Risks of Unemployment and Inflation
The Federal Reserve has kept its stance unchanged for the third consecutive meeting, indicating that uncertainty has further increased, and the risks of rising unemployment and inflation have both intensified.
On May 8, the Federal Reserve announced that it would maintain the benchmark interest rate at 4.25%-4.50%, in line with market expectations, marking the third consecutive meeting without any changes. Following the announcement of the Federal Reserve's interest rate decision, traders continued to believe that the Federal Reserve would lower rates before July, still anticipating three rate cuts this year.
Full Text of the Interest Rate Decision
Although fluctuations in net exports have impacted the data, recent indicators show that economic activity continues to expand steadily. In recent months, the unemployment rate has stabilized at a low level, and labor market conditions remain robust. However, inflation levels remain slightly elevated.
The committee's goal is to achieve maximum employment and 2% inflation in the long term. Uncertainty regarding the economic outlook has further increased. The committee is concerned about the dual risks facing its dual mandate (employment and price stability) and believes that the risks of rising unemployment and inflation levels have both increased.
To support its goals, the committee decided to maintain the federal funds rate target range at 4.25% to 4.5%. In considering whether to further adjust the width and timing of this target range, the committee will carefully assess the latest data, changes in the economic outlook, and the balance of risks. The committee will continue to reduce its holdings of government securities, agency debt, and agency mortgage-backed securities. The committee is firmly committed to supporting maximum employment and returning the inflation rate to the target level of 2%.
In assessing the appropriate monetary policy stance, the committee will continue to monitor the impact of the latest information on the economic outlook. If risks emerge that could impede the achievement of the committee's goals, the committee is prepared to adjust the monetary policy stance in a timely manner. The committee's assessment will take into account a variety of information, including labor market conditions, inflationary pressures and expectations, financial and international situations, etc.