Federal Reserve Chair Jerome Powell announced on Wednesday that current interest rates would remain at 5.3% and would not likely change soon due to stubbornly high inflation.
“My colleagues and I remain squarely focused on our dual mandate to promote maximum employment and stable prices for the American people,” Powell said at a press conference on May 1, following the conclusion of the Federal Open Market Committee’s two-day meeting.
Powell said the economy has progressed, but inflation is still too high.
“We are fully committed to returning inflation to our 2% goal,” Powell said. “Our restrictive stance on monetary policy has been putting downward pressure on economic activity and inflation, and the risks to achieving our employment and inflation goals have moved toward better balance over the past year.”
Powell added that the recent surge in inflation has taken the Fed further from achieving its 2% inflation objective. As a result, federal rates would remain high to push inflation rates down. He added that long-term expectations are that inflation will drop as the year progresses.
Earlier in the year, the Fed had signaled a desire to make gradual cuts to interest rates this year, but inflation, despite significantly dropping from last year, has remained high, as previously reported by The Dallas Express.
The Biden administration has taken heat from Americans for the significant interest rate hikes consumers have faced since he took office in 2021, as reported by The Hill. However, the administration has deflected blame, claiming it inherited a broken system from former President Donald Trump.
When Trump left office in December 2020, inflation sat at 1.36% after being at 1.17% and 1.18% the two previous months, respectively, per YCharts.