US Fed keeps key lending rate unchanged for 4th straight time

Published : Feb 1, 2024 - 08:44 Updated : Feb 1, 2024 - 08:44

Federal Reserve Board Chair Jerome Powell speaks during a news conference about the Federal Reserve's monetary policy, Wednesday, in Washington. (AP-Yonhap)

The US Federal Reserve held its benchmark lending rate steady for a fourth consecutive time during a monetary policy meeting on Wednesday, amid expectations that it would start lowering rates later this year.

After the two-day Federal Open Market Committee meeting, the central bank announced its decision to keep the rate between 5.25 and 5.50 percent, as Fed Chair Jerome Powell said that a rate cut in March is "probably not the most likely case."

The bank has maintained the rate at the current level since its freeze in September. The latest freeze put the gap between the key rates of South Korea and the United States at up to 2 percentage points.

Reiterating its inflation target, the bank stressed, "The committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent."

Asked to elaborate on the mention of the need for "greater confidence," Powell told reporters that the central bank is looking for "more good data" to believe that inflation is on a sustainable track toward its target.

"We do have confidence ... but we want to get greater confidence," he said. "What do we want to see? We want to see more good data. It is not that we are looking for better data ... We are looking (for) the continuation of good data that we have been seeing."

Asked if a rate cut is likely at the next FOMC meeting slated for March, Powell said that it may not be the most likely case.

"I don't think it's likely that the committee will reach a level of confidence by the time of the March meeting to identify March is the time to do that," he said. "That's probably not the most likely case or what we would call the base case."

Following the previous rate-setting meeting in December, Powell said the policy rate was likely at or near its peak for the tightening cycle -- remarks that indicated the Fed would pivot away from its rate hiking campaign launched in March 2022 to cool inflation. (Yonhap)