The Federal Reserve kept its benchmark lending rate unchanged in the existing range of 5.25% to 5.50% after its two-day meeting on Wednesday, November 1. In a statement, the Fed acknowledged the US economy’s resilience while noting the tighter financial conditions faced by households and businesses.

“A few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal. The process of getting inflation sustainably down to 2% has a long way to go,” CNBC quoted Powell as saying in his post-FOMC meeting address.

The Federal Reserve has upgraded its stance on the economy as the US central bank decided to keep interest rates unchanged for the second consecutive time. In its statement, the Fed said, “economic activity expanded at a strong pace in the third quarter.” In its September meet statement, policymakers said the economy had expanded at a “solid pace.”

The US Fed has aggressively raised interest rates 11 times since March 2022 in an attempt to fight inflation. The US economy has not only avoided a recession so far but the pace of economic growth of 4.9% per annum on the back of consumer spending. The inflation rate remains above the Fed target of 2%, even though it has receded from its four-decade peak last summer.

Meanwhile, the US indices sustained gains, but benchmark Treasury yields fell to two-week lows. The Dow Jones Industrial Average rose 105.05 points, or 0.32%, to 33,157.92; the S&P 500 gained 21.24 points, or 0.51%, to 4,215.04; and the Nasdaq Composite added 95.61 points, or 0.74%, to 12,946.84. Benchmark 10-year note yields were last at 4.801% after dropping as far as 4.778%, the lowest since Oct. 17.

-With inputs from agencies

(Edited by : Ajay Vaishnav)