The Federal Reserve on Wednesday held its benchmark interest rate steady, while upgrading its view of the U.S. economy.
The central bank said it would maintain the federal funds rate in a range of 5.25% to 5.5%, the same level as it announced two meetings ago, in July.
The Fed has sought to douse the hottest inflation in four decades by curbing demand for homes and autos, with price increases moderating this year.
While the Fed opted against increasing rates today, policymakers suggested they’re prepared to tighten further if inflation flares.
“By leaving rates unchanged while continuing to flag the possibility of further tightening to come, the Fed indicated today that it remains in ‘wait and see’ mode,” Andrew Hunter, deputy chief U.S. economist with Capital Economics, told investors in a research note. “But we suspect the data over the coming weeks will see the case for a final hike continue to erode, with the Fed likely to start cutting rates again in the first half of next year.”
Borrowing costs across the U.S. are running at two-decade highs, making it pricier for Americans to obtain loans such as mortgages and to carry credit card debt.
—This is a developing story and will be updated.