US Federal Reserve holds rates steady, flags ‘lack of progress’ on inflation

US Fed said it doesn’t plan to cut interest rates until it has “greater confidence” that price increases are slowing sustainably to its 2% target.

The US Federal Reserve emphasized that inflation has remained stubbornly high in recent months and said it doesn’t plan to cut interest rates until it has “greater confidence” that price increases are slowing sustainably to its 2% target. With this, US Fed has held interest rates steady for a sixth straight meeting at a 23-year high to fight price rise. The decision was taken unanimously as the Fed would keep the benchmark lending rate unchanged at 5.25-5.50 per cent, it said.

When will there be rate cuts by US Federal Reserve?

The exterior of the Marriner S. Eccles Federal Reserve Board Building is seen in Washington, DC. (Reuters)

Citing a "lack of further progress" towards its two percent inflation target, the Fed said in a statement, “The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks.”

What you need to know about US inflation?

Inflation has cooled from a peak of 7.1%, as per the US Fed’s preferred measure, to 2.7%, it said.

What else did US Federal Reserve announce?

The Fed also said that, starting in June, it would slow the pace of decline of its securities holdings, by “reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.”

What US Federal Reserve had said earlier on rate cuts?

Rate cuts by the Fed would lead to lower borrowing costs for consumers and businesses and provide relief for mortgages, auto loans and credit cards as well.