The Federal Reserve announced on Wednesday that it was again hitting "pause" on its aggressive interest rate hikes and keeping the target rate between 5.25 percent to 5.5 percent after the most recent meeting of the Federal Open Market Committee (FOMC).
In the post-meeting statement announcing the decision to keep interest rates at their previously decided level, the Fed event admitted that "[i]Inflation remains elevated."
Here's how the FOMC justified its decision:
The U.S. banking system is sound and resilient. Tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain. The Committee remains highly attentive to inflation risks.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. The Committee will continue to assess additional information and its implications for monetary policy. In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. 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 Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
As Townhall reported just last week, President Biden and his administration's claims of inflation "coming down" were shot to pieces when the Consumer Price Index showed prices surging upwards again. Headline CPI inflation hit an annual rate of 3.7 percent and core CPI inflation rose to 4.3 percent.
That is, despite key metrics showing inflation rising and at more than double the Fed's target of just 2.0 percent, the Fed decided to again take its foot off the interest rate hike gas pedal.
The last time the Fed hit pause, it proved too premature and subsequent hikes were deemed necessary, likely to be the case again following Wednesday's pause according to Alfredo Ortiz, president and CEO of the Job Creators Network.
"The Fed's rate hike pause will likely be short-lived as Bidenflation continues to rear its ugly head," Ortiz reasoned. "Despite the Fed's aggressive rate hikes, inflation has accelerated in recent months due to the ongoing reckless spending and anti-oil policies of the Biden administration and Congressional Democrats. Small businesses are facing a one-two punch of rising inflation and high interest rates, which reduce their access to credit," noted Ortiz. "For some, this month's interest rate pause is little more than a stay of execution."