The Korea Herald


US Fed keeps key lending rate unchanged for second consecutive time

By Yonhap

Published : Nov. 2, 2023 - 09:31

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The Federal Reserve's headquarters in Washington, D.C. (Herald DB) The Federal Reserve's headquarters in Washington, D.C. (Herald DB)

The US Federal Reserve held its benchmark lending rate steady at a 22-year high for a second consecutive time during a monetary policy meeting on Wednesday, as it keeps striving to bring down inflation to its 2-percent target.

After the two-day Federal Open Market Committee meeting, the central bank announced the decision to keep the rate between 5.25 and 5.50 percent. But it left open the possibility of a rate change later to achieve "maximum" employment and its inflation target.

In the last FOMC meeting in September, the bank froze the rate -- the second pause in its rate-hiking campaign that started in March last year with an aim to tame inflation. In the July FOMC meeting, it raised the rate by a quarter percentage point to the current level.

In a press release, the Fed gave its assessment of the overall US economic conditions.

"Recent indicators suggest that economic activity expanded at a strong pace in the third quarter. Job gains have moderated since earlier in the year but remain strong, and the unemployment rate has remained low," it said.

But it said the committee remains "highly attentive" to inflation risks, while noting the possibility of future monetary policy adjustment.

"The committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the committee's goals," the Fed said.

In a press conference, Fed Chair Jerome Powell said the committee is not thinking about rate cuts now "at all."

"We are not talking about rate cuts," he said. "We are still very focused on the first question, which is 'have we achieved a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2 percent over time sustainably?'"

It remains uncertain whether the Fed would continue to maintain the benchmark rate during the next FOMC meeting scheduled for Dec. 12-13.

The latest Fed rate freeze put the gap between the key rates of South Korea and the United States at up to 2 percentage points. (Yonhap)