The Federal Reserve has opted to neither lower nor raise the federal funds rate, which remains in the 5.25% to 5.5% range.
In making its decision, the central bank’s policy making Federal Open Market Committee cited its longstanding goals of achieving maximum employment and a 2% inflation.
“The Committee judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year,” said the Fed in a statement. “The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks.”
The Fed added it would “continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities.”
The decision follows today’s announcement by the U.S. Department of Labor that the Consumer Price Index, an inflation gauge that measures a collection of goods and services costs, held flat in May from the previous month, but increased 3.3% from one year earlier. Many economic observers speculated that this data would fuel the potential for rate cuts by the Fed.
The Fed’s decision runs counter to the examples set last week when the Bank of Canada and the European Central Bank respectively cut rates.