Key facts
- The Federal Reserve maintained its target range for the federal funds rate at 3-1/2 to 3-3/4 percent.
- Economic activity is expanding at a solid pace with strong productivity growth and capital investment.
- Job gains are keeping pace with the workforce, and the unemployment rate has remained stable.
- Inflation remains elevated above the Fed's 2 percent target.
- Market traders anticipate no rate hike in July but price in an 80% chance of a hike in September.
The Federal Open Market Committee (FOMC) decided to maintain the target range for the federal funds rate at 3-1/2 to 3-3/4 percent, citing solid economic expansion, strong productivity growth, and stable job gains. Despite elevated inflation relative to the Committee's 2 percent goal, attributed partly to supply shocks in sectors like energy, the Fed reaffirmed its commitment to price stability.