The US Federal Reserve has kept its key interest rate unchanged for a third straight time. The Fed kept its benchmark rate at about 5.4 percent, its highest level in 22 years. This has led to much higher costs for mortgages, auto loans, business borrowing and many other forms of credit. Higher mortgage rates have sharply reduced home sales. 

Spending on appliances and other expensive goods that people often buy on credit has also declined. Speaking at a news conference last night, Chair Jerome H. Powell said that Fed officials signaled that they expect to make three

quarter-point cuts to their benchmark rate next year.

So far, the Fed has achieved what few observers had thought possible a year ago. Inflation has tumbled without an accompanying surge in unemployment or a recession, which typically coincide with a central bank’s efforts to cool the economy and curb inflation. Though inflation remains above the Fed’s 2 percent target, it has declined faster than Fed officials had expected, allowing them to keep rates unchanged and wait to see if price increases continue to ease.

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