Fed Votes to Leave Interest Rates Unchanged, Suggests 'Progress On Vaccinations' Will Reduce Record Inflation

FED DECISION: The Federal Reserve votes to leave interest rates unchanged and points to a possible interest rate hike coming in March. https://t.co/EJyjXuSlj7 pic.twitter.com/RFvKp5eD24

— CNBC (@CNBC) January 26, 2022

Indicators of economic activity and employment have continued to strengthen. The sectors most adversely affected by the pandemic have improved in recent months but are being affected by the recent sharp rise in COVID-19 cases. Job gains have been solid in recent months, and the unemployment rate has declined substantially. Supply and demand imbalances related to the pandemic and the reopening of the economy have continued to contribute to elevated levels of inflation. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.

The path of the economy continues to depend on the course of the virus. Progress on vaccinations and an easing of supply constraints are expected to support continued gains in economic activity and employment as well as a reduction in inflation. Risks to the economic outlook remain, including from new variants of the virus.