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| ▲ U.S. Federal Reserve Chair Jerome Powell speaks during a press conference at the U.S. Federal Reserve in Washington on April 29, 2026, in this photo released by Reuters. (Yonhap) |
(3rd LD) FOMC-rate decision
(3rd LD) Fed holds rates steady, cites 'elevated' inflation, 'high level' uncertainty from Middle East war
(ATTN: ADDS more info, remarks in paras 15-18)
By Song Sang-ho
WASHINGTON, April 29 (Yonhap) -- The U.S. Federal Reserve on Wednesday held its benchmark interest rate steady for the third consecutive time, citing "elevated" inflation and a "high level" of economic uncertainty stemming from the ongoing Middle East conflict.
The central bank decided to leave the rate unchanged at the 3.5-3.75 percent range during the two-day Federal Open Market Committee (FOMC) meeting, which was likely to be the last rate-setting meeting under Chair Jerome Powell as his chairmanship is set to expire on May 15.
During a press conference, Powell said he would remain as a Fed governor "for a period of time," but plans to "keep a low profile" as he stressed that he stands by his earlier vow not to leave the Fed board until an investigation into the renovation of the Fed headquarters is "well and truly" over.
Wednesday's decision to stand pat put the gap between the key rates of South Korea and the United States at up to 1.25 percentage points.
"Inflation has moved and is elevated, in part reflecting the recent increase in energy prices," Powell said during the press conference.
He added, "Developments in the Middle East are contributing to a high level of uncertainty about the economic outlook."
The latest pause came as U.S. consumer prices in March rose 3.3 percent from a year earlier, marking the largest annual increase since May 2024, while oil prices have also surged amid the economic ramifications of the U.S.-Israeli war against Iran.
Of the 12 FOMC members, three did not support inclusion of an "easing bias" -- language signaling potential future rate cuts -- in the FOMC statement, though they supported maintaining the current rate. One member voted against the pause, preferring to lower the rate by a quarter percentage point.
Powell said that the central bank is "at the high end of neutral or perhaps mildly restrictive," which he said is "just the right place to be."
"So we can wait here and see how things work out before we act," he said.
The outgoing chair said that the press meeting was his last conference as the Fed chair as U.S. President Donald Trump's nominee for the top post, Kevin Warsh, is undergoing a Senate confirmation process. On Wednesday, the Senate Banking Committee voted to advance Warsh's nomination for a final confirmation vote.
Powell looked back on Trump's repeated attacks on him for not lowering interest rates as fast as Trump wanted, as well as legal actions concerning the central bank.
"I've never suggested that such verbal criticism is a problem, and neither has anyone else here, but these legal actions by the administration are unprecedented in our 113-year history, and there are ongoing threats of additional such actions," he said.
"I worry that these attacks are battering the institution and putting at risk the thing that really matters to the public, which is the ability to conduct monetary policy without taking into consideration political factors."
He pointed out that the central bank's independence comes from the law "to a significant extent," and a set of customs.
"We've had to go to court successfully so far to defend it. But you know the law does create a setting in which the Fed can and is directed to make monetary policy without consideration of political factors," he said.
"Part of it is law, but it goes beyond that though. There is a set of customs. There's a boundary line between the Fed and the administration (and) between the Fed and the Treasury Department, and we need to continue to respect those boundaries."
Powell first took the helm of the central bank in 2018 after Trump nominated him for the post during his first term. Powell's term as chair is set to end next month, but his tenure as a Fed governor will continue through January 2028.
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