Federal Reserve Maintains Interest Rates Unchanged, Powell Says “Next Step Unlikely to be a Rate Hike”

The Federal Reserve of the United States (FOMC) released its latest statement in the early morning of Taiwan today. It announced that the federal funds target rate would be maintained within the range of 5.25% to 5.5%, which is in line with market expectations. However, Federal Reserve Chairman Jerome Powell stated that there is still a lack of progress in achieving the 2% inflation target.

So far this year, the data has not provided us with greater confidence. It may take longer than previously expected to gain this confidence, and the Federal Reserve is prepared to maintain the current target federal funds rate at an appropriate time.

Last week’s GDP report showed a slowdown in overall growth, but prices are still steadily rising, which has raised concerns about the United States entering a period of stagflation. However, Federal Reserve Chairman Powell downplayed this idea.

From certain indicators, economic growth is at 3% and inflation is below 3%. I really don’t understand where this idea comes from.

He also humorously said, “I haven’t seen ‘stagflation’ or ‘inflation’.”

Powell also ruled out the possibility of a rate hike in the press conference after the meeting.

I think the next policy rate change is unlikely to be a rate hike unless there is enough evidence to prove that our policy stance is not sufficiently restrictive, but that is not what we see in the current situation.

After this statement, the stock market surged briefly. Bitcoin also briefly rose from 57K to 59K, but then fell back to its original level.

In addition, Powell emphasized the independence of the Federal Reserve, stating that politics and the upcoming U.S. presidential election are not factors the Federal Reserve considers.

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