Federal Reserve holds interest rates steady

This is a developing story about the Federal Reserve’s March interest rate cut decision. Please check back for updates.

The Federal Reserve on Wednesday announced it will leave interest rates unchanged, amid a softening labor market and growing uncertainty over the war in Iran.

Fed policymakers voted to leave the benchmark federal funds rate unchanged at its current range of 3.5% to 3.75%. The move follows the central bank’s decision to hold rates steady in January after three successive 25-basis-point rate cuts in September, October and December to close out last year.

Economic data showing a slowdown in the labor market, inflation continuing to run hotter than the Fed’s 2% target and the unrest in Iran prompted policymakers to continue to pause rate cuts.

The Federal Open Market Committee (FOMC) voted 11-1 in favor of leaving rates unchanged, with the lone dissent by Fed Governor Stephen Miran, who was in favor of a 25 basis point cut.

The FOMC’s statement noted that economic indicators suggest the economy is expanding at a solid pace, with low levels of job gains and somewhat elevated inflation.

It also noted that uncertainty surrounding the economic outlook “remains elevated” and that the “implications of developments in the Middle East for the U.S. economy are uncertain.” 

Federal Reserve Jerome Powell will hold a press conference to discuss the decision.

What does it mean for the economy?

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