Federal Reserve leaves interest rates at 0.25%, dismisses rising inflation as ‘transitory’

The Federal Reserve has spoken…

The United States central bank left its benchmark interest rate at 0.25 percent during the April Federal Open Market Committee (FOMC) policy meeting.

Officials also decided to keep the Eccles Building’s monthly $120 billion bond purchases intact.

The moves were widely expected.

In a policy statement, the Fed acknowledged rising inflation, although it is unconcerned right now. The Fed has stated it is willing to let inflation run greater than the conventional two percent target.

The Fed said in its FOMC statement:

“The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.

The COVID-19 pandemic is causing tremendous human and economic hardship across the United States and around the world. Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened. The sectors most adversely affected by the pandemic remain weak but have shown improvement. Inflation has risen, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.”

Financial markets were little changed following the end of the FOMC’s two-day powwow.

The Dow Jones Industrial Average remained down 140 points, the S&P 500 was flat, and the Nasdaq Composite Index was relatively unchanged. Treasurys were mostly up, with the benchmark 10-year yield rising 0.02 percent to 1.642 percent.

The US Dollar Index (DXY), which measures the greenback against a basket of currencies, was up 0.05% to 90.95.

Here is the full press conference: