The Federal Reserve keeps interest rates unchanged, Powell says "Next step is unlikely to be a rate hike"

The Federal Reserve kept the federal funds target rate in the range of 5.25% to 5.5%, meeting market expectations. However, Federal Reserve Chairman Powell stated that progress towards the 2% inflation target is still lacking. He also downplayed concerns about stagnant inflation and mentioned that the next step is unlikely to be a rate hike. His comments initially boosted the stock market and cryptocurrency prices, but the market later returned to its original levels.

Inflation Slowdown Lacks Progress, Maintaining Current Interest Rates Will Take Longer

The Federal Open Market Committee (FOMC) released its latest statement in the early hours of today in Taiwan. The Federal Reserve kept the federal funds target rate in the range of 5.25% to 5.5%, in line with market expectations. However, Federal Reserve Chairman Jerome Powell stated that progress towards the 2% inflation target is still lacking.

Data so far this year has not given us greater confidence. Gaining this confidence may take longer than previously expected, and the Federal Reserve is prepared to maintain the current target federal funds rate at the appropriate time.

Easing Concerns of Stagnant Inflation

Last week's GDP report showed overall growth slowing, but prices continue to rise steadily, sparking concerns about the United States entering a period of "stagflation," but Federal Reserve Chairman Powell downplayed this idea.

From certain indicators, economic growth is at 3%, with inflation rates below 3%. I really don't understand where this idea is coming from.

He also humorously remarked:

I don't see "stagnation" or "inflation."

Unlikely to Raise Interest Rates Next

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

I think the next policy rate change is unlikely to be an increase unless there is enough evidence to show that our policy stance is not restrictive enough, but this is not what we see in the current situation.

Upon this statement, the stock market surged briefly. Bitcoin also rose from 57K to 59K at one point, but later retreated to its original level.

In addition, Powell also emphasized the independence of the Federal Reserve, stating that politics and the upcoming U.S. presidential election "are not part of the Federal Reserve's considerations."