Federal Reserve officials announced Wednesday that, despite signs of economic deceleration, the institution is not prepared to reduce interest rates at this time.
The Federal Open Market Committee (FOMC) issued a statement following its July meeting, confirming that the interest rate remains unchanged at approximately 5.5%, where it has stood for the past year.
The committee reiterated its stance, stating it would not adjust rates “until it has gained greater confidence that inflation is moving sustainably toward 2 percent.”
The U.S. unemployment rate stands at 4.1%, the highest since February 2018, though still historically low.
On Tuesday, the Bureau of Labor Statistics reported that while layoffs remained minimal in June, the hiring rate has slowed to levels not observed since 2014.
Additionally, there has been an increase in the percentage of unemployed workers who have been without jobs for 27 weeks or more, with over 1.5 million workers now classified under long-term unemployment.
Despite acknowledging these shifts in labor market conditions, the Fed indicated they were not yet cause for concern.
“Job gains have moderated, and the unemployment rate has moved up but remains low,” stated Wednesday's announcement.
