Blitz Bureau
NEW DELHI: THE Federal Reserve held interest rates steady on January 28 amid what US central bank chief Jerome Powell described as a solid economy and diminished risks to both inflation and employment, an outlook that could signal a lengthy wait before any further reductions in borrowing costs.
“The economy has once again surprised us with its strength,” Powell said at a press conference after Fed policymakers voted 10-2 to hold the central bank’s benchmark interest rate in the 3.50%-3.75% range following a two-day meeting. Noting broad internal support for the decision, Powell said the Fed remains “well-positioned” to assess when or whether another rate cut may be needed.
Since the Fed’s last policy meeting in December, when it delivered a third straight rate cut, “the upside risks to inflation and the downside risks to employment have diminished. But they still exist,” Powell said. “We think our policy is in a good place.”
Both Governor Christopher Waller, a contender to replace Powell when his term as central bank chief ends in May, and Governor Stephen Miran, on leave from his job as an economic adviser at the White House, dissented in favor of a quarter-percentagepoint rate cut.
The actual rate decision, which was widely expected by financial markets, was overshadowed during the post-meeting press conference as reporters questioned Powell about threats to Fed independence and whether he intended to stay on at the central bank after his term as central bank chief ends in May.