Source: cnn.com

The Federal Reserve held interest rates at a 22-year high for a second consecutive meeting, amid a backdrop of a growing economy and labor market and inflation that is still well above the central bank’s target.

In a widely expected move, the FED’s rate-setting group unanimously agreed to hold the key federal funds rate in a target range between 5.25%-5.5%, where it has been since July, following a string of 11 rate hikes, including four in 2023.

The decision included an upgrade to the committee’s general assessment of the economy, noted that “economic activity expanded at a strong pace in the third quarter”. Despite the Fed aggressively raising interest rates since March 2022 in a bid to combat inflation, the US economy has not only avoided a recession so far, but instead expanded at a blistering 4.9% annualized rate in the third quarter, mostly due to solid consumer spending.

“The process of getting inflation sustainably down to 2% has a long way to go,” Fed Chair Jerome Powell said in remarks at a news conference. Powell added that the FOMC is not considering or even discussing rate reductions at this time. He also said the risks around the Fed doing too much or too little to fight inflation have become more balanced.