US Fed Keeps Interest Rate Unchanged for Sixth Time Amid High Inflation

US Fed Meeting: US Federal Reserve's decision to maintain interest rates at a 23-year high reflects concerns about stubborn inflationary pressures. Despite indications of easing inflation, Fed Chair Jerome Powell after Federal Open Market Committee meeting emphasised that inflation remains "still too high" and hinted that rate cuts aren't imminent until re's greater confidence in price growth moving towards 2 per cent target.

“It is likely that gaining such greater confidence will take longer than previously expected,” Powell told a news conference after end of a two-day policy meeting. “We are prepared to maintain current target federal funds rate for as long as appropriate.”

Powell highlighted uncertainty surrounding path forward and indicated that future rate justments would be data-dependent. While Fed's preferred inflation index has decreased from its peak in 2022, it still exceeds 2 per cent target, standing at 2.7 per cent.

Although Powell downplayed likelihood of a rate hike at next policy meeting in June, market response was mixed. 

“I think it’s unlikely that next policy rate move will be a hike,” Powell ded. 

Stocks Movement 

Initially, US stocks rallied following announcement but ended mostly down as investors absorbed decision. S&P 500 surged before closing slightly lower, while London's FTSE 100 also dipped. In Asia, Japan's Nikkei 225 experienced early losses, while markets in Hong Kong and Shanghai were closed for a holiday.