Interest rates static: Fed Interest Rates Unchanged
Published: September 17, 2015
Interest rates static: Fed Interest Rates Unchanged, The Federal Reserve announced on Thursday that it would keep interest rates near zero as officials assessed the impact of tighter financial conditions and slower global growth on the domestic economy.
The Fed’s decision, widely expected by investors, showed that officials still lacked confidence in the strength of the domestic economy even as the central bank has entered its eighth year of overwhelming efforts to stimulate growth.
“Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term,” the Fed said in a statement after a two-day meeting of its policy-making committee, the Federal Open Market Committee.
The policy-making committee has scheduled meetings in October and December, and an initial move is possible at either meeting.
Janet L. Yellen, the Fed’s chairwoman, said at a news conference after the release of the statement that the decision to keep rates near zero had been a close call.
“The recovery from the Great Recession has advanced sufficiently far and domestic spending has been sufficiently robust that an argument can be made for a rise in interest rates at this time,” Ms. Yellen said. But she said “heightened uncertainness abroad” and slow inflation had convinced the committee to wait for more evidence, including continued job growth, “to bolster its confidence.”
Ms. Yellen said China’s economic troubles, and slower growth in other foreign economies, “bears close watching” and was a crucial reason the Fed chose to delay raising interest rates. But she said the Fed’s concern should not be overstated. So far, she said, foreign developments had not altered significantly the Fed’s expectations for domestic economic growth.
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