The Federal Reserve, the US central bank, kept its benchmark interest rate unchanged ranging between 4.25% and 4.5% on Wednesday, reacting to the stubbornly high inflation, NPR reported.
Chairman Jerome Powell and other Fed policymakers remain hesitant to cut rates further, citing persistent price pressures and a resilient job market. December’s inflation report showed consumer prices rising at an annual rate of 2.9%, a slight increase compared to the previous month.
Gas and food prices, particularly eggs, which saw a nearly 37% annual jump, have kept inflation higher than desired.
The job market remains strong, with US employers adding 256,000 jobs in December and the unemployment rate dipping to 4.1%. Sectors like retail and restaurants led the gains, supporting the Fed’s decision to hold rates steady.
President Donald Trump has repeatedly urged the Fed to slash interest rates, calling them “far too high.” He reiterated this call at the World Economic Forum last week, insisting that he would “demand” lower rates to stimulate the economy.
However, the Fed remains in no rush to comply. Since September, it has already cut rates by a full percentage point but remains cautious about further reductions.