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发帖数: 621 | 1 No liftoff: Federal Reserve leaves rates near 0%
The Federal Reserve is still waiting for the right moment.
In a decision that could have gone either way, the Fed decided not to raise
its key interest rate in September. America's central bank hasn't raised
rates in almost a decade and rates have been stuck near zero since the
depths of the financial crisis in December 2008.
Concerns about a global economic slowdown, low inflation in the U.S. and
volatile stock markets in August lowered the chances of a September rate
hike. The Fed's inaction Thursday appears to confirm that those fears
weighed on its decision despite a U.S. economy that's strengthening overall.
"Recent global economic and financial developments may restrain economic
activity somewhat," the Fed's committee said in a statement.
The stock market zigzagged after the decision was announced, mounting small
gains and losses.
Related: The Fed is handcuffing itself
Although they didn't raise rates now, the majority of Fed committee members
believe there will be a rate hike in 2015, according to its economic
projections. The committee has two remaining meetings this year -- in
October and December.
Overall, the Fed does sound more optimistic about the U.S. economy. It
raised its expectations for economic growth this year to 2.1% from 1.9%, and
it lowered its projection for the unemployment rate by the end of the year
to 5%. Currently, unemployment is 5.1%.
Still, it wasn't enough to raise rates in September.
Related: Meet Janet Yellen: the most powerful woman in the world
"The committee anticipates that it will be appropriate to raise the target
range for the federal funds rate when it has seen some further improvement
in the labor market," and remains reasonably confident that inflation will
pick up, the Fed's committee said.
A variety of prominent voices -- from chiefs of the IMF and World Bank to a
Nobel Prize-winning economist -- had urged the Fed not to raise rates in
September. It's unclear how much, if any, of that commentary weighed on the
Fed's decision making.
Two forces are playing into the Fed rate hike debate: a good-but-not-great U
.S. economy and a gloomy economic outlook outside the U.S. The Fed's two
primary goals are to help the economy achieve full employment and keep
inflation from getting out of hand.
However, stock market volatility -- triggered by the weak global economy --
plays into the Fed's decision too. |
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