The US Federal Reserve concluded its two-day monetary policy meeting on the 29th, announcing that the Federal Open Market Committee has agreed to keep the federal funds rate target range unchanged at 3.5% to 3.75%, though clear divisions have emerged within the Fed.
This decision aligns with mainstream market expectations and marks the fifth consecutive time this year that the Fed has maintained rates unchanged.
In its statement, the Fed noted that despite heightened uncertainties brought about by factors such as the Middle East conflict, economic activity continues to expand robustly. Inflation remains elevated compared to the 2% target, partly due to supply shocks raising prices in sectors such as energy. The Federal Open Market Committee remains committed to achieving price stability.
Out of the 12 members of the Committee, 3 voted against keeping the interest rate unchanged, advocating instead for a 25 basis point rate hike.
Fed Chair Walsh described the discussions among the 12 members during the decision-making process as intense, likening it to a “real family quarrel.”
At the press conference he convened, he said: “We are mostly discussing matters of great importance to the execution of monetary policy. We have not shied away from these issues, nor are we afraid to face them. My colleagues had more interactions with each other, and it was like a real family quarrel.”