Nov. 1 (UPI) — The Federal Reserve on Wednesday decided to leave interest rates unchanged as U.S. inflation decelerates but remains higher than the Fed’s 2% target.
In a statement, the Fed said it decided “to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent.”
The Fed said it remains “strongly committed to returning inflation to its 2 percent objective.”
Stocks were mostly higher Wednesday as financial markets expected the Fed to hold interest rates steady, pausing its recent campaign of raising interest rates to combat inflation.
The pause comes after 11 consecutive interest rate increases and as the strengthening U.S. economy continues to absorb the costs of interest rate hikes without slowing consumer spending.
Wall Street was looking for signs of what the Fed monetary policy is likely to be going forward.
The Fed statement Wednesday assessed the U.S. economy as strong and said job gains have moderated since earlier in the year but remain strong, and the unemployment level remained low inflation, while lower, is still higher than the 2% target.
Wednesday was a busy day for economic data as The Treasury Department announced bond auctions to sell notes worth $112 billion to finance debt and the private company ADP reported 110,000 jobs were created in September.
Ahead of the central bank policy meeting Wednesday Fed Chair Jerome Powell said the Fed was watching developments in Israel and Ukraine closely for risks to the U.S. economy.
Included in Fed policy calculations are surging Treasury yields, known to be a drag on the economy.
