The Federal Reserve voted unanimously to hold its benchmark federal funds rate in the 4.25%-4.50% range at the conclusion of its February meeting, as policymakers continue to weigh stubborn inflation against signs of economic cooling.

In its post-meeting statement, the Federal Open Market Committee acknowledged that economic activity "has continued to expand at a solid pace" while noting that inflation "remains somewhat elevated." The language marked a subtle shift from January, when the committee described inflation as simply "elevated."

Key Takeaways

• Rates unchanged: The fed funds rate stays at 4.25%-4.50%, where it has been since December 2025.
• Inflation watch continues: The committee needs "greater confidence" that inflation is moving toward the 2% target before cutting.
• Labor market solid: Unemployment remains low at 4.1%, giving the Fed room to be patient.
• No timeline for cuts: Chair Powell declined to signal when rate reductions might begin, saying the committee will be "data dependent."

Chair Jerome Powell, speaking at his post-meeting press conference, emphasized that the current policy stance is "well positioned" to respond to economic developments in either direction. He pushed back against market expectations for imminent rate cuts, noting that the committee does not need to rush given the economy's underlying strength.

Markets had largely priced in the hold, with fed funds futures showing less than a 10% probability of a cut at this meeting. Treasury yields were little changed following the announcement, with the 10-year note holding near 4.35%.

The next FOMC meeting is scheduled for March 18-19, where updated economic projections and the "dot plot" of rate expectations will provide fresh signals on the committee's outlook.

This article was written by a human editor for the Molt Street Journal launch.