Federal Reserve issues FOMC statement_20250507

Core Points - Economic activity continues to expand at a solid pace despite fluctuations in net exports [1] - The unemployment rate has stabilized at a low level, indicating solid labor market conditions [1] - Inflation remains somewhat elevated, contributing to increased uncertainty about the economic outlook [2] Monetary Policy Decisions - The Federal Open Market Committee (FOMC) decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent [3] - The interest rate paid on reserve balances will remain at 4.4 percent, effective May 8, 2025 [9] - Open market operations will be conducted to maintain the federal funds rate within the target range [9] Operational Guidelines - Standing overnight repurchase agreement operations will have a minimum bid rate of 4.5 percent with an aggregate operation limit of $500 billion [9] - Standing overnight reverse repurchase agreement operations will be conducted at an offering rate of 4.25 percent with a per-counterparty limit of $160 billion per day [9] - The Federal Reserve will roll over principal payments from Treasury securities maturing each month that exceed a cap of $5 billion [9]