What is the impact of holding interest rates steady?

Why the Fed decided to keep rates unchanged highlights the Federal Reserve's decision to maintain interest rates at their current level despite significant political pressure. Holding interest rates steady means that borrowing costs remain relatively high, which can slow down consumer spending and business investments. While this may seem like a negative for economic growth, the primary purpose is to curb inflation. By not lowering rates, the Fed ensures that inflation does not surge again, which could erode purchasing power and destabilize the economy. Although this move may cause temporary slowdowns in the economy, it is viewed as necessary to prevent runaway inflation. Therefore, while some may criticize this decision for limiting economic expansion, it ultimately aims to ensure long-term stability and avoid the risks of uncontrolled inflation.