The Federal Reserve is leaving interest rates unchanged for now. The Fed signaled it will likely raise rates in March, the first hike in three years. Rate hikes are seen as a response to rising inflation. Fed Chair Jerome Powell told reporters the overall economic outlook remains highly uncertain. He said the national economy continues to show "great strength and resilience" during the ongoing COVID pandemic.
Powell cited solid job gains, rising wages and a sharp drop in unemployment. At the same time, he noted ongoing COVID-related impacts are fueling inflation. Powell said the Fed expects inflation to start turning around over the course of this year. The Fed also plans to complete the phaseout of its asset purchases program in March. That effort aimed to boost the economy at the height of the pandemic.