Fed signals policy has reached a neutral range leaving markets to price volatility guidance and institutional trust

The U.S. Federal Reserve on Wednesday left its benchmark interest rate unchanged, maintaining the target range for the federal funds rate at 3.5% to 3.75%, as officials assessed easing inflation pressures against lingering uncertainty in the economic outlook. In a statement following its two-day policy meeting, the Federal Open Market Committee said economic activity continues to expand at a solid pace, while inflation remains “somewhat elevated.”

Fed Chair Jerome Powell said recent rate cuts totaling 75 basis points since September have brought policy into a range of “plausible estimates of neutral,” allowing the central bank to proceed cautiously. Two policymakers — Christopher Waller and Stephen Miran — dissented, favoring an immediate quarter-point cut. Powell emphasized that future decisions would depend on incoming data and the balance of risks, underscoring the Fed’s commitment to returning inflation to its 2% target.

The U.S. Federal Reserve on Wednesday left its benchmark interest rate unchanged, maintaining the target range for the federal funds rate at 3.5% to 3.75%, as officials assessed easing inflation pressures against lingering uncertainty in the economic outlook. In a statement following its two-day policy meeting, the Federal Open Market Committee said economic activity continues to expand at a solid pace, while inflation remains “somewhat elevated.”

Fed Chair Jerome Powell said recent rate cuts totaling 75 basis points since September have brought policy into a range of “plausible estimates of neutral,” allowing the central bank to proceed cautiously. Two policymakers — Christopher Waller and Stephen Miran — dissented, favoring an immediate quarter-point cut. Powell emphasized that future decisions would depend on incoming data and the balance of risks, underscoring the Fed’s commitment to returning inflation to its 2% target.

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