The Federal Reserve kept its benchmark interest rate at the current 5.25% to 5.5% target range, as policymakers acknowledged that inflation has eased over the past year but remains elevated.
As was widely predicted on and off Wall Street, the Fed continued its long-term messaging saying that it is committed to dropping inflation to its 2% target range as the economic outlook remains uncertain.
“Recent indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained strong, and the unemployment rate has remained low,” said the central bank's rate-setting group — the Federal Open Market Committee (FOMC) — in its statement marking the conclusion of its two-day policy meeting today (March 20). “The committee judges that the risks to achieving its employment and inflation goals are moving into better balance,” the FOMC said.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
“It’s good to see the Fed understands it can cut rates while still being tough on inflation, given that the real fed funds rate will still be considered very restrictive," said Bryce Doty, senior PM/VP at Sit Investment Associates.
The FOMC also said it would continue to reduce its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The committee also forecast three potential quarter-point rate cuts by the end of this year, reiterating its outlook from December.
The news comes on the heels of last week’s fourth-quarter gross domestic product (GDP) report, which showed a 3.2% growth rate. The rate is expected to slow to an average of 2% this year, which is in line with the economy’s potential growth rate, according to Kiplinger’s GDP Outlook report.
In remarks last week at a Kentucky production facility, Treasury Secretary Janet Yellen said that the nation’s economic recovery has been “the fairest" recovery on record. She said that GDP growth is strong and that inflation is down significantly, ”though we continue to take action to bring prices down, including health care costs.”
Federal Reserve Chairman Jerome Powell is set to provide more details on the FOMC decision at his subsequent press conference.
RELATED CONTENT
-
Crypto Trends to Watch in 2026Cryptocurrency is still less than 20 years old, but it remains a fast-moving (and also maturing) market. Here are the crypto trends to watch for in 2026.
-
Original Medicare vs Medicare Advantage Quiz: Which is Right for You?Quiz Take this quick quiz to discover your "Medicare Personality Type" and learn whether you are a Traditionalist, or a Bundler.
-
Ask the Editor: Capital Gains and Tax PlanningAsk the Editor In this week's Ask the Editor Q&A, Joy Taylor answers questions on capital gains tax rates and end-of-year tax planning
-
Crypto Trends to Watch in 2026
Cryptocurrency is still less than 20 years old, but it remains a fast-moving (and also maturing) market. Here are the crypto trends to watch for in 2026.
-
Time Is Running Out to Make the Best Moves to Save on Your 2025 TaxesDon't wait until January — investors, including those with a high net worth, can snag big tax savings for 2025 (and 2026) with these strategies.
-
I'm an Insurance Pro: If You Do One Boring Task Before the End of the Year, Make It This One (It Could Save You Thousands)Who wants to check insurance policies when there's fun to be had? Still, making sure everything is up to date (coverage and deductibles) can save you a ton.
-
4 Smart Ways Retirees Can Give More to Charity, From a Financial AdviserFor retirees, tax efficiency and charitable giving should go hand in hand. After all, why not maximize your gifts and minimize the amount that goes to the IRS?
-
Small Caps Hit a New High on Rate-Cut Hope: Stock Market TodayOdds for a December rate cut remain high after the latest batch of jobs data, which helped the Russell 2000 outperform today.
-
What Investors May Face in the New Year: InterviewKeith Lerner, the chief market strategist and chief investment officer for Truist Wealth, speaks with Kiplinger.
-
3 Year-End Tax Strategies for Retirees With $2 Million to $10 MillionTo avoid the OBBB messing up your whole tax strategy, get your Roth conversions and charitable bunching done by year's end.
-
'Politics' Is a Dirty Word for Some Financial Advisers: 3 Reasons This Financial Planner Vehemently DisagreesYour financial plan should be aligned with your values and your politics. If your adviser refuses to talk about them, it's time to go elsewhere.
