Fed makes no move on interest rates
BUSINESS RECORD STAFF Sep 17, 2015 | 8:15 pm
1 min read time
245 wordsAll Latest News, Banking and FinanceFederal Reserve officials today left interest rates unchanged, opting to delay an increase amid stubbornly low inflation, an uncertain outlook for global growth and recent financial market turmoil, Bloomberg reported.
“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 Federal Open Market Committee said in a statement today in Washington, D.C.
In holding their benchmark federal funds rate at zero to 0.25 percent, policymakers showed they are still not convinced inflation will move gradually back to their 2 percent target, despite continued gains in the labor market. Unemployment in August fell to 5.1 percent, its lowest level since April 2008.
“On balance, labor market indicators show that underutilization of labor resources has diminished since early this year,” officials said.
Richmond Federal Reserve Bank President Jeffrey Lacker dissented, saying he preferred to raise the target rate by 0.25 percentage point.
Afternoon trading was choppy, and the three major U.S. indexes were up less than 1 percent after hitting session highs and then briefly turning negative after the news. Reuters reported.
“There’s no need to rock the boat right now,” said Brian Dolan, head market strategist at Drivewealth in New Jersey. “Again the disconcerting element is the downgrade to the interest rate trajectory, which could provide solace to investor sentiment overall. Given the global headwinds, the last thing we need right now was a hike in rates and any kind of hawkish projections.”
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