Arab Finance: The US Federal Reserve kept its benchmark federal funds rate unchanged at a target range of 3.75% to 4%, as inflation remains elevated, according to a statement.
The Federal Open Market Committee (FOMC) approved the decision and affirmed its commitment to maintaining ample reserves in the banking system.
The Fed said economic activity continued to expand at a strong pace, with domestic spending remaining resilient despite elevated uncertainty partly stemming from geopolitical developments. It also highlighted that job gains kept pace with workforce growth, while the unemployment rate had changed little.
On his part, Fed Chair Kevin Warsh announced changes to the central bank’s meeting structure starting in 2027, saying that while eight meetings a year remained “the right number” for the FOMC, one meeting would be dedicated exclusively to broader monetary policy strategy rather than interest-rate decisions.
In 2028, the Fed will plan to hold two meetings focused on strategic discussions and the remaining six will be centered on policy setting, Warsh added.
Last September, the Fed raised its benchmark interest rate by 25 basis points to a target range of 3.75% to 4%, marking its first increase since 2023.
