Federal Reserve holds interest rates steady as consumer confidence improves and inflation slows
The Federal Reserve announced Wednesday it was keeping interest rates at their current levels amid improving consumer confidence and a declining inflation rate.
In the run-up to Wednesday’s announcement, some Fed officials have been signaling that the current rate has been enough to knock inflation down toward the central bank’s 2% target.
The federal funds target rate has remained at 5.25% to 5.5% since last summer, following 11 increases that began in March 2022. The rate sets a benchmark for other interest rates throughout the economy — everything from credit cards to mortgages, and business and auto loans.
Some economists believe these higher rates have helped pull down inflation.
In December, the main measure of consumer-focused inflation, the 12-month consumer price index, came in at at 3.3% — little changed from the previous month’s 3.1% measurement.
And the Fed’s preferred inflation gauge, the personal consumption expenditures price index, came in even lower, at 2.6%.