The Federal Open Market Committee, unsurprisingly, decided to not raise the federal funds rates due to recent economic factors.
The federal funds rate once again remains between 0.25% and 0.5%, which is the same level as when the Fed originally announced it would raise rates back in December.
Here’s part of the FOMC’s explanation in its meeting minutes released on Wednesday:
Information received since the Federal Open Market Committee met in April indicates that the pace of improvement in the labor market has slowed while growth in economic activity appears to have picked up. Although the unemployment rate has declined, job gains have diminished. Growth in household spending has strengthened. Since the beginning of the year, the housing sector has continued to improve and the drag from net exports appears to have lessened, but business fixed investment has been soft. Inflation has continued to run below the committee's 2% longer-run objective, partly reflecting earlier declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation declined; most survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months.
“The decision to leave rates the same was widely expected, especially after the disappointing job numbers in May,” said NAFCU Chief Economist and Director of Research Curt Long. “July is still a possibility if employment data is better this month, but it is more likely the committee will now wait until the third quarter or later.”
The Fed plans to meet four more times this year in June, September, November and December.