The Federal Reserve announced Wednesday that it would maintain its federal funds target range at 4.25% to 4.50% despite continuously rising inflation.
The Fed’s decision to maintain its target range came after the consumer price index, a broad measure of the prices of everyday goods, rose 2.9% in December 2024. The decision met economists’ expectations that the Fed would skip cutting rates this month.
The Fed previously lowered its target range three consecutive times in 2024 in an attempt to stimulate the U.S. economy. Stubbornly-high inflation ran rampant during former President Joe Biden’s term and imposed steep costs on many small businesses and consumers.
Notably, 59.5% of Americans disapproved of Biden’s handling of the economy, according to polling averages from RealClearPolling. Many American workers also struggled under Biden’s economy due to increased competition in the labor market and a rising number of U.S. jobs going toward foreign-born workers and government employees.
Since returning to the Oval Office on Jan. 20, President Donald Trump has issued a flurry of executive actions, including signing an executive order requiring “emergency price relief” to be delivered to Americans. The president also recently introduced an executive order aimed at establishing U.S. “leadership in digital financial technology,” as well as an “Unleashing American Energy” order which he says will “restore economic prosperity” in the U.S., “including for those men and women who have been forgotten by our economy in recent years.”
Exit polls revealed that the economy was among the top issues for voters in the 2024 presidential election. Some recent surveys have revealed that many American business leaders and small business owners have an improved outlook on the U.S. economy amid Trump’s recent return to office.
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