WASHINGTON–As expected, the Federal Reserve’s Open Market Committee has adjourned its July meeting without making any changes to rates, leaving the target range for the federal funds rate between 5.25% and 5.5%.
“Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have moderated, and the unemployment rate has moved up but remains low,” the FOMC said. “Inflation has eased over the past year but remains somewhat elevated. In recent months, there has been some further progress toward the Committee's 2% inflation objective.
In its statement, the Fed said that 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%.
“As expected, the Federal Open Market Committee held rates steady but suggested that a rate cut is imminent," said America's Credit Unions Deputy Chief Economist Curt Long said in a statement. "Where previous statements highlighted the committee’s attention to inflation risks, the July statement says there are now ‘risks to both sides of its dual mandate,’ which would include full employment. Such language, which aligns with recent comments from Fed officials, strongly suggests that a 25-basis point rate cut is coming in September.”
Reduced Holdings
In addition, the FOMC said will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities.
The FOMC is scheduled to next meet in September.