Federal Reserve leaves interest rates unchanged

The Federal Reserve left its interest rates untouched at 4.25% to 4.5% during its latest policy meeting in Washington, D.C. on Wednesday, according to the official statement from the central bank.

The decision came as the Committee said the US economy is still expanding at a “solid pace,” despite trade-related disruptions. Inflation is still running hot, and labor conditions are holding strong, but the Fed admitted it’s more worried than before.

The Committee said the unemployment rate has stayed low in recent months and described the labor market as stable.

But it also warned that the overall economic picture is becoming harder to predict. “Uncertainty about the economic outlook has increased further,” the Committee said. It noted that the risks of both higher unemployment and rising inflation have gone up since the last meeting.

Fed keeps tightening policy, but holds off on rate hike

The Fed said it’s still focused on its long-term goals: keeping inflation near 2% and supporting maximum employment. But with both inflation and labor showing signs of imbalance, the Committee chose not to increase rates yet.

Instead, it said future hikes will depend entirely on the next batch of data. “The Committee will carefully assess incoming data, the evolving outlook, and the balance of risks,” the statement said.

They also confirmed they’ll continue pulling money out of the financial system by reducing their holdings of Treasury securities, agency debt, and mortgage-backed securities. That strategy is staying in place even as interest rates hold. The Committee made it clear they’re not backing off their tightening path entirely — just pausing for now.

The Fed said it’s ready to respond fast if anything shifts. If the data turns sour, they’ll tweak policy again. “The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge,” they wrote. That includes signs of worsening inflation, unemployment, or other unexpected hits to the economy.

The Fed said it will base all future decisions on a wide range of information: job numbers, price levels, expectations, financial conditions, and what’s happening internationally. The central bank’s full assessments will look at every angle, not just one or two charts.

They’re not ruling anything out — and they’re not making any promises either.

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