Federal Reserve holds interest rates steady as inflation remains above 2%
Source: CBS News
MoneyWatch
Federal Reserve holds interest rates steady as inflation remains above 2%
By Aimee Picchi
Edited By Alain Sherter, Anne Marie Lee
January 29, 2025 / 2:01 PM EST / CBS News
The Federal Reserve said Wednesday that it will leave its benchmark rate unchanged, hitting the brakes on lowering borrowing costs for individuals and businesses after a flurry of rate cuts starting last fall.
The Fed said it will maintain the federal funds rate at its current range of 4.25% to 4.5%. The decision comes after the central bank trimmed rates three times starting in September 2024, which has pushed down the federal funds rate — the rate banks charge each other for short-term loans — by one percentage point.
The pause, the Fed's first rate decision since President Trump returned to office on Jan. 20, comes as economists predict the central bank is likely to take a wait-and-see approach to the president's economic policies, given that some, such as higher tariffs, could prove inflationary.
The Fed's decision to keep rates steady reflects stubborn U.S. inflation, which remains close to 3% on an annual basis. That has fueled concerns that additional rate cuts could reignite price increases, making it more difficult to get to the Fed's 2% target. ... "After undertaking three interest rate cuts in last four months of 2024, the Federal Reserve has decided to pump the brakes,"Joe Gaffoglio, CEO of Mutual of America Capital Management, said in an email.
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Read more: https://www.cbsnews.com/news/federal-reserve-fomc-meeting-today-interest-rates-decision-january-2025/
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Published Wed, Jan 29 20252:00 PM ESTUpdated 3 Min Ago
Jeff Cox
@jeff.cox.7528
@JeffCoxCNBCcom
The Federal Reserve held its key interest rate in check Wednesday, reversing a recent trend of easing policy as it examines what is likely to be a bumpy political and economic landscape ahead.
In a widely anticipated move, the central bank’s Federal Open Market Committee left unchanged its overnight borrowing rate in a range between 4.25%-4.5%.
The decision followed three straight cuts since September 2024 worth a full percentage point and marked the first Fed meeting since frequent Fed critic Donald Trump assumed the presidency last week and almost immediately made known his intentions that he wants the central bank to cut rates.
The post-meeting statement dropped a few clues about the reasoning behind the decision to hold rates steady. It offered a somewhat more optimistic view on the labor market while dropping a key reference from the December statement that inflation “has made progress toward” the Fed’s 2% inflation goal.
https://www.cnbc.com/2025/01/29/fed-rate-decision-january-2025.html
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