As had been widely expected, the U.S. Federal Reserve kept its benchmark interest rate at its current range of between 2.25% and 2.5%, despite repeated calls by U.S. President Donald Trump to lower rates.
The American central bank ended a two-day policy meeting on Wednesday by announcing its decision to keep the federal fund rate range unchanged. Standing pat was exactly what economists who cover the Fed were expecting. The central bank has hiked its benchmark rate eight times since 2016 in a bid to tame inflation, but signaled a few months ago that the pace of future hikes was far from certain.
The Federal Reserve’s decision disappointed President Trump, who called Wednesday for the central bank to cut interest rates and "rocket" economic growth. When asked by reporters about political influence, Federal Reserve Chairman Jerome Powell said the Fed is a "non-political institution.
"We don't think about other factors" outside of how the economy is doing, Chairman Powell said, adding that the panel felt that the central bank’s policies on interest rates were "in a good place."
The Federal Reserve offered an upbeat forecast for the U.S. economy on Wednesday, saying that "economic activity rose at a solid rate." In March, the Federal Reserve had said it appeared that growth had slowed from the fourth quarter of 2018.
Last week, it was reported that the U.S. economy grew at a surprisingly strong 3.2% annual rate in the January-March quarter. It was the best performance for a first quarter in four years, and it surpassed initial forecasts that annual growth could be as weak as 1% at the start of the year.
