The Federal Reserve decided to keep interest rates steady on Wednesday and commented on a “strong” pace for the national economy in the third quarter; at the same time, it left the door open to potential future hikes and increased borrowing costs. Rates will remain in the range of 5.25%-5.50%.
U.S. central bank officials held a two-day meeting after which they unanimously agreed to leave the benchmark overnight interest rate untouched from its last modification in July. The Fed expressed notably stronger confidence in the economy than it did in its September meeting where it referenced “solid” economic pacing.
The central bank, however, noted that with inflation still at an “elevated” level they continue to consider “the extent of additional policy firming that may be appropriate to return inflation to 2% over time.”
All eyes will be on Federal Reserve Chairman Jerome Powell, he is set to hold a press conference at 2:30 p.m. (EST) and his words will elucidate the perspective of the Fed more clearly, particularly in regards to future hikes. The statement thus far released by the Fed is cautious, they reference “the lags with which monetary policy affects economic activity and inflation and economic and financial developments,” as they continue to monitor the situation before arriving at any determinative conclusions.
