FOMC sees ‘lack of further progress’ in reducing inflation

Citing a “lack of further progress” in recent months in dialing back inflation, the Federal Open Market Committee announced today that it will maintain the target range for federal funds rate at 5.25% to 5.5%. The FOMC also reiterated that it does not expect to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward the Federal Reserve’s 2% goal.

“So far this year, the data have not given us that greater confidence,” Fed Chairman Jerome Powell said in a news conference. “In particular, readings on inflation have come in above expectations. It is likely that gaining such greater confidence will take longer than previously expected.”

Asked whether the FOMC may raise rates later this year, Powell said he saw that outcome as unlikely. “I think we’d need to see persuasive evidence that our policy stance is not sufficiently restrictive to bring inflation sustainably down to 2% over time. That’s not what we think we’re seeing,” he said.