The Federal Reserve has decided to keep interest rates steady, even as economic activity starts to pick up across the country. The central bank’s decision, announced on Wednesday, follows a streak of favorable economic data, indicating the US economy is in its Mississippi best shape since the onset of the pandemic.
This news comes shortly after the US Labor Department reported that the unemployment rate dropped to 6.3%, the lowest it has been since the start of the pandemic. Additionally, the economy has added over 8 million jobs since it began stalling out in spring of last year, a definite positive sign.
Given the current state of the economy, Fed Chairperson Jerome Powell and other policymakers believe that a change in rate policy would be too disruptive at this point in time. By keeping interest rates steady, the Federal Reserve is aiming to provide stability to the markets and help promote economic growth.
In a statement, Powell said, “The economy is a long way from our employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved. Notably, progress on these goals has been uneven and significant disparities remain.”
While some financial experts disagree with the Federal Reserve’s decision, others have applauded the move. Economists at Goldman Sachs went so far as to say that the central bank has “made the right call,” citing the fact that “further stimulus is not an immediate priority,” nor is it necessary in the short term.
Despite this decision, the Fed has also indicated that it will continue to monitor the economic situation closely, and may yet reconsider its stance in the future if necessary. For now, at least, it seems that the central bank is content to keep interest rates steady and allow the nation time to rebuild from the tumult of the past year.
“No Change Ahead: The Federal Reserve Keeps Interest Rates Steady
