Tuesday, July 1, 2025

US Federal Reserve Maintains Current Interest Rates As Economic Activity Remains Low

The Federal Open Market Committee finished its two-day meeting on Wednesday, and has decided to keep interest rates at their current levels, citing continued declines in economic activity for the remainder of the year.

In a much anticipated move, the US Federal Reserve announced it will maintain its benchmark overnight lending rate near zero, where it has been set since March 15 at the onset of the pandemic. In addition to maintaining low interest rates, the Federal Open Market Committee, which is responsible for setting forth monetary policies, also reaffirmed its pledge to continue with bond purchases and various liquidity and lending programs, as well as extend temporary repo operations and dollar liquidity swaps to March 31, 2021.

Despite the economy and employment activity picking up slightly over the last couple of months, the levels still remain significantly below pre-pandemic numbers. In the meantime, weakened consumerism and a drop in oil prices have been keeping a spike in consumer price inflation at bay, but the economic downturn is far from over. Back in June, the Federal Reserve estimated GDP growth to fall by 6.5%, under the premise that rates remain steady until at least 2022.

Information for this briefing was found via CNBC. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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