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The Federal Reserve announced Wednesday that it will not raise interest rates, marking only the second occasion out of six meetings this year when rates were held steady.
For the past 17 months, the U.S. central bank has used higher rates to try to get a grip on inflation, but it has had to balance that with the negative economic consequences that come with them. This pause gives officials more time to observe the effects of previous rate hikes before deciding if they should jack rates any higher before the end of the year.
"Given how far we have come, we are in a position to proceed carefully as we assess the incoming data and the evolving outlook and risks," Federal Reserve Chairman Jerome Powell told reporters in a news conference Wednesday.
After a two-day Federal Open Market Committee meeting, members of the Fed decided to keep the federal funds rate at the same level they've been at since July, which is a target range between 5.25% and 5.5%. The federal funds rate determines what it costs for banks to borrow money from each other, and it’s currently the highest it's been in more than two decades.
