The Federal Reserve held its benchmark interest rate steady on Wednesday, maintaining a cautious stance as rising energy costs threaten to complicate its ability to balance persistent price pressures with a cooling job market in the U.S.
The federal funds rate remained unchanged at a target range 3.50% to 3.75%. The decision, which was widely expected, prolonged a pause that began at the conclusion of the Fed’s policy meeting in January, following a series of interest rate cuts late last year.
Voting members of the Federal Open Markets Committee (FOMC) were split for a sixth policy meeting in a row. Although most rallied around the idea of leaving borrowing costs untouched, Stephen Miran and Christopher Waller advocated for a 25-basis-point interest rate cut.
In its official statement, the FOMC noted that “inflation remains somewhat elevated” and job gains have remained low, even as the unemployment rate ticked up to 4.4% in February.
The Fed highlighted a data-dependent approach to future interest rate cuts, underscoring a “wait-and-see” approach that crystallized among most policymakers in January.
“Uncertainty about the economic outlook remains elevated,” the FOMC said. “The implications of developments in the Middle East for the U.S. economy are uncertain.”
The Fed typically focuses on underlying inflation in the U.S. economy, preferring a gauge that strips out volatile food and energy costs. In the 12 months ended January, the Personal Consumption Expenditures Price Index rose 3.1%, up from 3% a month prior.
Editor's note: This story is breaking and will be updated with additional details.
