Fed holds rates steady, takes less confident view on inflation

Published On Jan 29, 2025, 2:00 PM

The Federal Reserve decided to hold its key interest rate steady at a range between 4.25% and 4.5%, following three consecutive rate cuts since September 2024. The Fed's statement reflected a somewhat optimistic outlook on the labor market but expressed uncertainty regarding inflation, stating progress has stalled since inflation remains elevated. The Fed emphasized the need for further evidence of reduced inflation or weaknesses in the labor market before considering additional rate adjustments. Moreover, market reactions to the Fed's decision indicated a decline in stock prices, suggesting a cautious investor sentiment amidst political and economic uncertainties, especially with the new presidency under Donald Trump.