As expected, the Federal Reserve kept its benchmark interest rate in a range of 2.25 percent to 2.5 percent in a statement yesterday after its two-day meeting. The biggest reason the Fed is staying the course? Low inflation.
Their post-meeting policy statement noted: “On a 12-month basis, overall inflation and inflation for items other than food and energy have declined and are running below 2 percent,” On Monday, data was released showing that core inflation, as measured by the personal consumption expenditure price index, fell to 1.6 percent in March, a 19-month low.
Fed chair Jerome Powell indicated after the meeting that rates are likely to stay right where they are for the foreseeable future. “We do think our policy stance is appropriate right now,” he said. “We don’t see a strong case for moving in either direction.”
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