The Federal Reserve decided to keep the interest rate on hold for the first time in over a year, but warned future hikes may still be required.
The decision comes after inflation fell to its lowest level since 2021, sitting at four per cent in the 12 months to May.
That figure is down from 4.9 per cent the month prior, and the 40-year high of 9.1 per cent last June.In a statement the Federal Reserve cited expanding economic activity, employment gains and lower unemployment. “Holding the target range steady at this meeting allows the committee to assess additional information and its implications for monetary policy,” it said.
“In assessing the appropriate stance of monetary policy, the committee will continue to monitor the implications of incoming information for the economic outlook.”“In determining the extent of additional policy firming that may be appropriate to return inflation to two percent over time,” it said. “The Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”
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