Inflation has still not come "down," as President Biden and his administration often claim, and the Federal Reserve seemed to check Biden's assertions by holding interest rates steady following the latest meeting of the Federal Open Market Committee (FOMC) on Wednesday.
In the release from the latest meeting of central bankers, the FOMC even went so far as to directly contradict Biden's statements by saying inflation "has eased over the past year" — a slower rate of increase is notably not a decrease — "but remains elevated."
BREAKING: The Federal Reserve will likely hold interest rates steady for a 4th straight meeting but avoid signaling an imminent interest-rate cut https://t.co/UcmDem1a7b pic.twitter.com/G1vMiIUhUF
— Bloomberg Markets (@markets) January 31, 2024
As a result, the Fed did not reduce interest rates for the fourth time in a row — which remain at the highest level since early 2001 — as it insists it is working toward getting inflation back to its goal of just two percent. The latest release of the Consumer Price Index showed that annualized core inflation remains nearly double the Fed's goal at 3.9 percent.
Notably, one phrase that has been included in every FOMC statement since the March 2023 failures of banks including Silicon Valley Bank and First Republic Bank was not included in Wednesday's release: "The U.S. banking system is sound and resilient."
There's a line notably missing from Wednesday's Federal Reserve interest rate announcement that has been in every FOMC statement since March 2023 when banks started failing: pic.twitter.com/WSVKutAsoz
— Spencer Brown (@itsSpencerBrown) January 31, 2024
Here's of what the FOMC had to say about its latest decision to again do nothing with interest rates while not making the usual assertion that America's banking system is sound:
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals are moving into better balance. The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks.
In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent. 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.
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