(RTTNews) - Citing a lack of further progress toward its 2 percent inflation objective in recent months, the Federal Reserve on Wednesday announced its widely expected decision to leave interest rates unchanged.
The Fed said it decided to maintain the target range for the federal funds rate at 5.25 to 5.50 percent in supports of its dual goals of maximum employment and inflation at the rate of 2 percent over the longer run.
Members of the Fed also reiterated they need "greater confidence" inflation is moving sustainably toward 2 percent before they consider cutting interest rates.
Meanwhile, the Fed said it would continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities but revealed plans to slow the pace of decline.
The central bank said would slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
The monthly redemption cap on agency debt and agency mortgage-backed securities will be maintained at $35 billion, and the Fed will reinvest any principal payments in excess of this cap into Treasury securities.
The Fed's next monetary policy meeting is scheduled for June 11-12, with the central bank likely to leave rates unchanged once again.
The June meeting had previously been seen as a likely target for a rate cut, but the probability has fallen dramatically following recent data showing sticky inflation.
According to CME Group's FedWatch Tool, the chance of a rate cut in June have plunged to only 7.3 percent compared to 56.8 percent just one month ago.
