With a significantly less restrictive monetary policy than it has been, while the economy is still strong, we don't need to hurry, says Fed chief Jerome Powell at a press conference.
The message was expected and means that the interest rate remains in the interval 4.25-4.50 percent.
In a statement, the Fed's board sees a favorable development for the economy on the labor market, while flagging that inflation "continues to be somewhat elevated".
"Unemployment has stabilized at a low level in recent months", the statement reads, according to CNBC.
In December, the Fed phrased it slightly differently by also talking about inflation "moving towards" the target of 2 percent inflation.
But Jerome Powell describes it mostly as a linguistic change and not a signal.
No Contact with Trump
The interest rate decision is the first since Donald Trump took office as president. Trump has called for more interest rate cuts.
I won't comment at all on what the president has said, says Powell in response to a question from a reporter.
Powell, who says he has had no contact with Trump, explains that it's too early to think about what Trump's policy – in terms of tariffs, immigration, and monetary policy – will mean.
We will closely follow the development. There is no difference from how it usually is when a new government takes office, he says.
Economic Soft Landing
In 2022-2023, the Fed raised interest rates rapidly to curb the effects of soaring inflation. But last fall, the Fed began to lower interest rates.
In September, it was lowered by 0.50 percentage points, in November by 0.25 percentage points, and in December by another 0.25 percentage points.
Most important for the Fed is to achieve a balanced economic soft landing in the USA. The goal is to take control of inflation without breaking the economic growth.
After the announcement of an unchanged interest rate, the prices on all three major indexes on the New York stock exchange fell, but then recovered again.
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