The Federal Reserve left its benchmark interest rate unchanged Wednesday after cutting it three times in a row last year, the Associated Press reports. The news signals a more cautious approach as the Fed seeks to gauge where inflation is headed and what policies President Donald Trump may pursue.
The Fed reduced its rate last year to 4.3% from 5.3%, in part out of concern that the job market was weakening. Hiring had slowed in the summer and the unemployment rate ticked up, leading Fed officials to approve an outsized half-point cut in September, yet hiring rebounded last month, and the unemployment rate declined slightly, to a low 4.1%.
In its statement Wednesday, the Fed upgraded its assessment of the job market, calling it “solid” and noting that the unemployment rate “has stabilized at a low level in recent months.” The Fed also appeared to toughen its assessment of inflation, saying that it “remains somewhat elevated.” Both a healthier job market and more stubborn inflation typically would imply fewer Fed rate cuts in the coming months.
