US Fed leaves rates unchanged

Increased inflation concerns loom ahead of Fed's committee meeting

FOMC announcement: Fed keeps interest rates steady

The Federal Reserve appears on track to raise interest rates once more this year but will likely hold off on any action when its latest policy meeting ends Thursday.

"Job gains have been strong, on average, in recent months, and the unemployment rate has declined", the Fed wrote in its statement.

The statement reflected little change in the USA central bank's outlook for the economy since the last policy meeting in September, with inflation remaining near its 2 percent target, unemployment falling and risks to the economic outlook appearing to be "roughly balanced".

"The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective over the medium term".

Shortly after the US midterm elections, the US Federal Reserve voted to keep the benchmark interest rate the same at 2 to 2.25 percent. It was the eighth hike since policymakers started to normalize monetary policy in late 2015. Officials are equally split over whether to raise rates two, three or four more times next year.

Now, every meeting will be live; and just in time, too, as the Fed signals it is nearing the point when interest rates will be close to "neutral", and may only raise rates a bit farther, or not at all.

That could be viewed as an indication the Fed could move more cautiously, with fewer than the expected three rate hikes next year.

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In recent weeks, financial markets have been gripped by worry and volatility, and some analysts think that in its statement Thursday the Fed may take note of that anxiety as a potential risk to economic growth. Rates could rise to 3% next year.

The statement overall reflected little change in the Fed's outlook for the economy since its last policy meeting in September.

The Federal Reserve said Friday it will begin issuing a new report twice a year assessing the stability of the USA financial system.

Data released in late October showed the U.S. economy grew at a 3.5 per cent annual rate in the third quarter, well above the roughly 2 per cent annual growth pace the Fed and many economists regard as the underlying trend. The central bank will hold its next policy meeting on December 18-19.

Data released in late October showed the US economy grew at a 3.5 percent annual rate in the third quarter, well above the roughly 2 percent annual growth pace the Fed and many economists regard as the underlying trend.

That was well above the roughly 2% rate many economists and the Fed believe is the underlying trend. Trump's public criticism has aroused concern that he is intruding on the central bank's long-respected political independence and its need to operate free of outside pressure.

Powell, who was Trump's hand-picked choice to lead the Fed, has avoided responding directly.

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