The U.S. Federal Reserve ended its two-day monetary policy meeting on the 28th, announcing that it would keep the federal funds rate target range unchanged at 3.5% to 3.75%.
This decision was in line with market expectations.
In a statement released after the meeting, the Federal Open Market Committee (FOMC) said that current indicators show that U.S. economic activity continues to expand solidly, but uncertainty about the economic outlook remains high. Employment growth remains sluggish, there are some signs of stabilization in the unemployment rate, and inflation remains at a relatively high level.
The announcement showed that, among the 12 members of the FOMC, 10 supported the decision of the day’s monetary policy meeting, while the dissenting votes came from Federal Reserve Governors Milan and Waller, who advocated for a 25 basis point rate cut.
Meanwhile, at a press conference, Federal Reserve Chair Powell pointed out that the foundation of the U.S. economy is solid, and that last year saw robust expansion, which is expected to continue on a solid basis into 2026, with some signs of stabilization in the unemployment rate.
When talking about the prospects for a rate cut, Powell said that if the labor market weakens, a rate cut would be needed; if the labor market remains strong, there is no need to cut rates. No one expects a rate hike at the next meeting; a rate hike is not anyone's baseline assumption.
When asked by the media for advice to his successor, Powell responded, “Stay away from politics.”
He emphasized that the significance of the Fed’s independence lies in avoiding having directly elected officials take charge of the monetary policy-making process, allowing the Fed to better serve the public. If independence is lost, it will be difficult to restore credibility.
He does not believe the Fed will lose its independence.
Powell’s term will end in May. U.S. President Trump has repeatedly pressured the Fed to cut rates and criticized Powell for always acting “too late and too wrong.”