That’s no surprise, as the Fed keeps interest rates where they are.

The Federal Open Market Committee (FOMC) decided to maintain the federal funds rate in the range of 5.25-5.5%, which has been maintained since July of last year. Of course, this came as no surprise to many.

In addition to noting that the economy continued to expand at a “robust pace”, job growth remained strong and unemployment remained low, the committee added that “further progress toward the 2% inflation target has been lacking.” ” In recent months.

The FOMC notes that both the consumer price index and personal consumption expenditures (PCE) index rose in March. CPI rose from 3.2% in February to 3.5% in March, and PCE rose from 2.5% in February to 2.7% in March.

“The Committee considers that over the past year there has been a shift towards better balancing the risks to employment and achieving the inflation targets. “The economic outlook is uncertain, and the Committee is paying close attention to inflation risks,” the FOMC said in a statement.

The Fed said it “will not reduce its target range until it has greater confidence that inflation will continue to move toward 2%.” “It will likely take longer than expected to gain confidence,” Federal Reserve Chairman Jerome Powell added at a press conference following the FOMC announcement.

The committee added that it would slow the decline in Treasury holdings starting in June by reducing the monthly repayment limit from $60 billion to $25 billion. However, we will maintain a monthly payment limit of $35 billion on agency debt and agency mortgage-backed securities and reinvest principal payments in excess of this limit in Treasury securities.

In typical boilerplate fashion, the committee said it would continue to monitor incoming economic information and was prepared to adjust its position if risks emerged that could hinder its objectives.

Even at the beginning of the year when optimism was higher, few people expected a rate cut in May. The first production cut target was always June or July.

The Federal Reserve has not yet updated its summary of its outlook for interest rates and other economic indicators, but in March it called for three rate cuts in 2024. It will be interesting to see if the dot plot changes after this meeting. Many analysts believe the rate cut could be delayed until at least September, given the recent rise in inflation.

Chairman Powell did not say when he would cut interest rates, but said in response to a question, “It is unlikely that the next policy action will be a rate increase.”

Markets appeared undisturbed as the S&P 500 remained roughly flat following the Fed’s statement at 2pm ET.