WASHINGTON — The Federal Reserve held interest rates steady at its meeting this week and tweaked its post-meeting statement to reflect what appears to be a stronger commitment to nudge up inflation.
Meeting market expectations, the central bank's Federal Open Market Committee said Wednesday it will hold its benchmark funds rate between 1.5% to 1.75%, a range where it has been since the latter part of last year.
The decision marked the second straight meeting the Fed made no changes to rates following three consecutive reductions in 2019. The rate sets the standard for what banks charge each other for overnight lending but also is used as a benchmark for much consumer debt.
Little changed in the post-meeting statement, save for what could be interpreted as a bit more resolution toward raising what has been a lackluster pace of inflation. The committee adjusted the language to reflect that policy is geared toward "inflation returning to the Committee's symmetric 2 percent objective."
That language differed from the long-standing boilerplate statement that the Fed was looking to get inflation "near" the benchmark that it considers healthy for a growing economy.
In recent months, Fed officials have expressed concern over the inability to get inflation to the 2% level. While consumers welcome low prices, the Fed worries that low expectations will continue to keep inflation and, consequently, interest rates at below-normal levels, thus providing little flexibility to cut during future downturns.
Officials hope they can jawbone inflation higher by committing to keeping rates low until the inflation level rises. They even have indicated, through the "symmetric" terminology, that they will allow inflation to run above target for a while.
"We wanted to underscore our commitment to 2% not being a ceiling, to inflation running symmetrically around 2% and we're not satisfied with inflation running below 2%," Fed Chairman Jerome Powell said during his post-meeting news conference.
Powell said the change to the statement came following discussions at December's meeting, when some members through "near" was a concession to sub-2% inflation.
Elsewhere, there were few changes in the statement.
The only other adjustment was a reduction in the characterization of consumer spending. That was cut from "strong" in December to "moderate" at this week's two-day meeting.
While the Federal kept its benchmark rate steady, it did make an adjustment to the interest it pays on funds stored at the central bank. The Fed boosted the interest on excess reserves rate, known as IOER, 5 basis points to 1.6%.
Otherwise, though, the statement continued to see the labor market as "strong" and economic growth as "rising at a moderate rate."
The decision was unanimous. Several board members last year objected to the Fed's rate cuts.