US Fed skips rate hike, keeps interest rate unchanged between 5.25% - 5.5% range

By Ovunc Kutlu

ISTANBUL (AA) - The US Federal Reserve skipped an interest rate increase Wednesday, as widely expected, and kept its federal funds rate unchanged between the 5.25% - 5.5% target range.

"Recent indicators suggest that economic activity has been expanding at a solid pace," it said in a statement, replacing the word "moderate" in the previous meeting's statement. "Job gains have slowed in recent months but remain strong," it added, also replacing the "robust."

The Federal Open Market Committee (FOMC), however, noted that inflation remains elevated.

The decision to keep rates unchanged was unanimous as all 12 members of the Committee voted in favor of the move.

It is the second interest rate skip by the Fed after it skipped one in June, as the central bank raised rates by a total of 525 basis points from March 2022 to July 2023 in 11 meetings to fight record inflation that climbed last summer to its highest in more than 40 years.

After soaring to 9.1% in June last year, annual consumer inflation dropped to 4% in May and 3% in June this year, but came in at 3.2% in July and climbed to 3.7% in August.