US Fed says economy and jobs still 'solid', correct to await clarity

(Sharecast News) - Rate-setters in Washington D.C. stood pat on interest rates, as expected, while conceding the difficulty of pursuing its goals in the current climate.

In its policy statement, the Federal Open Market Committee said that the economy was continuing to expand at a solid pace, notwithstanding swings in imports, and that the jobs market remained "solid" too.

Nonetheless, the FOMC also judged that risks had risen for both higher unemployment and inflation.

All told, the target range for the Fed funds rate was kept at 4.25-4.50%.

Stocks on Wall Street initially fell back slightly after the decision was announced, but as of 1853 GMT the S&P 500 was off by just 0.21% or 11.38 points at 5,595.53.

In parallel, the yield on the benchmark 10-year US Treasury was three basis points lower at 4.286%, having earlier dipped to 4.26%.

Regarding the outlook for monetary policy, in his post-meeting press conference Fed chief, Jerome Powell, said that whether or not interest rate cuts would be needed over the remainder of 2025 would depend on how the current disruptions to trade finally played out.

Uncertainty about the future path of the economy was "extremely elevated", Powell added.

But right now "the economy is doing fine", policy was "less restrictive and in a good place" so for the moment the correct thing to do was to wait for more clarity on how the economic outlook was likely to play out.

Wednesday night' decision was unanimous.