US Federal Reserve keeps interest rate unchanged for sixth time in row

WASHINGTON, May 1 (KUNA) - The US Federal Reserve maintained Wednesday the targeted range of the benchmark interest rate unchanged between 5.25 percent and 5.5 percent, for the sixth straight policy meeting, as inflation remains elevated.
In a press release, the Federal Open Market Committee (FOMC), the Federal Reserve committee in charge of policy setting, pointed out that indicators suggest that economic activity has continued to expand at a solid pace.
"Job gains have remained strong, and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated. In recent months, there has been a lack of further progress toward the Committee's 2 percent inflation objective," the FOMC clarified in a statement.
It affirmed that it seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run.
The Committee judged that the risks to achieving its employment and inflation goals have moved toward better balance over the past year. The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks.
"In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks," the FOMC said in a statement.
The Committee said it does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.
In addition, the Committee vows to continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities.
"Beginning in June, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from USD 60 billion to USD 25 billion," added the statement.
"The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at USD 35 billion and will reinvest any principal payments in excess of this cap into Treasury securities." The Committee reiterated strong commitment to returning inflation to its 2 percent objective.
In assessing the appropriate stance of monetary policy, the Committee said it will continue to monitor the implications of incoming information for the economic outlook.
The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals.
The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments. (end) asj.ibi