APARTMENT ADVOCATE
NATIONAL APARTMENT ASSOCIATION
FOMC Keeps Policy Rate Unchanged Wary of Remaining Inflationary Pressures
BY GEORGE RATIU
The Federal Reserve’ s ratesetting committee kept the short-term policy rate unchanged at the July meeting. Investors anticipated the Federal Open Market Committee decision due to the trajectory of price growth and resilient employment trends. The central bank maintains its focus on keeping employment stable and returning inflation to the 2.0 % target.
Amid intensifying pressure on the Federal Reserve chairman to drop interest rates to lower borrowing expenses for the government, the members of the FOMC have maintained a steady approach to setting monetary policy. The overriding concern of the
committee has been a resurgence in inflation, spurred by a steady job market and the economic shock of renewed import tariffs which historically have pushed prices of consumer goods higher.
Real gross domestic product rose at an annual pace of 3.0 % in the second quarter of the year, buoyed by solid consumer spending. With resilient consumer spending driving economic activity, companies kept a stable pace of employment, leading to 782,000 net new jobs in the first six months of the year, a low unemployment rate and continued wage gains. At the same time, consumer prices experienced a rebound near the midpoint of the year.
The Consumer Price Index rose from an annual 2.3 % rate in April to 2.7 % in June. And the Personal Consumption Expenditures Index ticked up from 2.2 % in April to 2.3 % in May.
There are concerns that American households may be under rising financial stress. The number of open jobs has been steadily dropping over the past four years. At the same time, many job seekers are spending longer looking for employment. Household debt remains near record high, leaving little cushion for consumers facing still-rising prices for food, utilities, housing, and medical services.
36 | TRENDS SEPTEMBER 2025 www. aamdhq. org