US Fed keeps interest rate unchanged amid high energy prices

WASHINGTON-- The US Federal Reserve on Wednesday decided to maintain its target range for the federal funds rate at 3.5-3.75 percent as high energy prices added inflation pressures.

"Recent indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained low, on average, and the unemployment rate has been little changed in recent months. Inflation is elevated, in part reflecting the recent increase in global energy prices," said the Federal Open Market Committee (FOMC) in a statement.

"Developments in the Middle East are contributing to a high level of uncertainty about the economic outlook. The Committee is attentive to the risks to both sides of its dual mandate," the FOMC went on in the statement.

"In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 3-1/2 to 3-3/4 percent," the statement said.

In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the committee will carefully assess incoming data, the evolving outlook and the balance of risks, it said.

The FOMC reiterated its commitment to supporting maximum employment and returning inflation to its 2 percent objective.

Of the 12 FOMC members, 11 voted for keeping the rate unchanged. Stephen Miran, who voted against the action, preferred to lower the target range for the federal funds rate by 0.25 percentage point at the meeting.

While supporting the decision to maintain the target range for the federal funds rate, three other FOMC members did not support inclusion of an easing bias in the statement at this time.