US Fed keeps policy rates unchanged, for now

The US Federal Reserve has decided to keep its policy rates unchanged, as the central bank saw no need for an immediate reduction in interest rates. 

Accordingly, the Federal Open Market Committee at its meeting on Wednesday decided to maintain the federal funds rate at the existing 4.25-4.50 per cent range. 

Chairman Jerome Powell said any decision on rate cuts would depend on incoming data on inflation and jobs.

The US economy is on a stable course now with healthy macroeconomic fundamentals. Any change in the current economic landscape will depend on disruptive policies the Trump administration may take on matters related to tariffs, taxes or immigration.

Fed is holding policy decisions as the emerging situation is uncertain. 

FOMC said it would assess all incoming data before deciding the extent and timing of any changes in the federal funds rate.

However, the Treasury will continue to unwind its holdings of agency debt and mortgage‑backed securities. 

Meanwhile, the Federal Reserve Board, on 17 January, announced that it has withdrawn from the Network of Central Banks and Supervisors for Greening the Financial System (NGFS).

Fed cited the increasingly broadening scope of the work of the NGFS to cover a wider range of issues that are outside the board’s statutory mandate.