Federal Reserve leaves key US rate unchanged

WASHINGTON(AFP) – The US Federal Reserve decided Wednesday to keep its benchmark interest rate unchanged amid mixed signals about the direction of the US economy.

While the central bank noted the continued ‘’strong labor market’’ and ‘’solid’’ gains in economic activity, it also highlighted a slowdown in investment by businesses and households and inflation, which has fallen below the Fed’s target.

After raising the key lending rate four times last year, the Fed voted unanimously to keep it in a range of 2.25-2.5 percent.

Conflicting economic data has complicated the Fed’s decision-making, while repeated attacks by President Donald Trump have left the institution open to concerns it might bow to political pressure.

But Fed Chair Jerome Powell stressed, ‘’We think that our policy stance is appropriate at the moment. And we don’t

see a strong case for moving in either direction.’’

Asked whether there was a case building to cut rates to push inflation closer to the Fed’s two percent target, Powell told reporters central bankers are ‘’comfortable’’ about policy at the moment.

And he defended the committee’s actions to date, saying they were not responsible for low inflation which in part is due to factors that ‘’appear to be transient or idiosyncratic.’’

But he said policymakers will be ‘’watching inflation carefully.’’

Powell also again stressed that the Fed does not respond to political pressure.

He said ‘’we don’t think about short term political considerations, we don’t discuss them and we don’t consider them in making our decisions one way or the other.’’

The statement by the ratesetting Federal Open Market Committee offered just a few key changes of language.