US central bank leaves benchmark rate unchanged
The US Federal Reserve left its key lending rate unchanged again on Wednesday and said it had made "some further progress" in its inflation fight. After two days of deliberations, policymakers voted unanimously to maintain the US central bank's benchmark interest rate between 5.25 percent and 5.50 percent, the Fed announced in a statement -- keeping rates at a 23-year high. After a small uptick in inflation earlier this year, recent data suggest the Fed's mission of bringing inflation back down to its long-term target of 2 percent is now firmly back on track. Its favoured measure of headline inflation eased to an annual rate of 2.5 percent last month, while economic growth has remained resilient, and the labour market has come into better balance. "In recent months, there has been some further progress toward the Committee's 2 percent inflation objective," the Fed said. This marks a slight change in tone from its decision in June, when it noted only that "modest further progress" had been made. "The Committee judges that the risks to achieving its employment and inflation goals continue to move into better balance," the Fed said, adding that it was "attentive to the risks to both sides of its dual mandate." At the most recent rate decision in June, Fed officials responded to a small uptick in inflation by lowering the number of cuts they penciled in for this year from three down to just one. But since then, the official figures have painted a better picture, and futures traders now assign a probability of around 60 percent that the US central bank will make at least 0.75 percentage-points of cuts this year, according to CME Group data. Those cuts are expected to come in the form of three separate quarter-point moves. If the Fed does move in September, its decision would thrust the independent US central bank into the middle of the 2024 presidential election battle between former president Donald Trump and Vice President Kamala Harris. Trump has accused Powell -- who he nominated -- of displaying political favouritism towards the Democratic party, and suggested that he would not reappoint the central banker as Fed chair if he wins in November. (AFP)