FOMC announcement: Fed keeps interest rates steady

12 November, 2018, 15:58 | Author: Kevin Carter
  • Increased inflation concerns loom ahead of Fed's committee meeting

As expected, the Federal Reserve held off on raising interest rates at its policy meeting today, leaving the federal funds rate at 2 to 2 ¼%.

While household spending continues to show strong growth, business fixed investment "moderated" from the fast pace it saw at the beginning of the year.

"In view of realized and expected labor market conditions and inflation, the Committee made a decision to maintain the target range for the federal funds rate at 2 to 2 ¼ percent", the FOMC said in a statement.

"A few participants expected that policy would need to become modestly restrictive for a time and a number judged that it would be necessary to temporarily raise the federal funds rate above their assessments of its longer-run level", said the minutes.

"Information received since the Federal Open Market Committee met in September indicates that the labor market has continued to strengthen and that economic activity has been rising at a strong rate", the Federal Reserve said in a monthly statement that is closely parsed by economists and investors. It was the eighth hike since policymakers started to normalize monetary policy in late 2015.

Oil neared three-month lows, surrendering early gains as investors focused on global crude supply, which is increasing more quickly than many had expected. The 10-year Treasury note yield, a benchmark for both consumer and business borrowing costs, was 3.23 per cent, around the highest since 2011.

More news: U.S. shooter posted online during his attack

Analysts will be studying the minutes of this week's meeting, to be released in three weeks, for any insight into economic threats Fed policymakers may see, such as the trade war between the United States and China.

Overall U.S. economic output expanded at a 3.5% annual rate in the third quarter after rising at a 4.2% pace in the second quarter, the Commerce Department reported last month.

In September, Fed officials penciled in plans to raise their benchmark short-term rate once more this year.

If Jerome Powell, the Fed's chairman, sounds calm about inflation, the markets will rally. The central bank will hold its next policy meeting on December 18-19. Some believe there will be four hikes in 2019 as the Fed responds to continued strong growth while some see only one or two hikes next year as the boost from the $1.5 trillion in tax cuts passed last year begins to fade.

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.

"We consider the best thinking, the best theory, and the best evidence. we don't consider political factors or things like that", Powell told reporters at a press conference in September.

Recommended:



Popular

Apple devices are about to invade Amazon
As part of the deal, only Apple-authorized resellers will now be allowed to sell Apple and Beats products on Amazon's marketplace. The company said it only affects the original iPhone X , which has been superseded by the iPhone XS and XR.

Former Philippines First Lady handed lengthy jail sentence
That allowed him to shutter the legislature, muzzle the free press and jail or kill those who dared to oppose his dictatorship. The younger generation of Marcoses have led high-profile careers, despite the dark past associated with their name.

Ryan Giggs Backs Wayne Rooney’s Return To England
World Cup runners-up Croatia are in last place in League A Group 4, having played a game less than group leaders Spain and England .

Pompeo to meet top aide to Kim Jong Un on Thursday
But Yang Moo-jin, a professor at the University of North Korean Studies in Seoul, said that the postponement was a bad sign. But the Blue House would not reveal the reason for the postponement, referring questions to the State Department.

Gillum now says recount possible in Florida's governor race
In Florida, a machine recount is triggered if the number of votes separating two candidates is 0.5 percent or less. Under Florida law, a recount is mandatory if the winning candidate's margin is less than 0.5 percentage points.

Rajinikanth flays AIADMK for protest against film 'Sarkar'
However, recently in an interview, TTV Dhinakaran revealed that Komalavalli is not the birth name of Jayalalithaa. Law Minister C Ve Shanmugham had said certain scenes amounted to inciting violence and warned of "action".

Manchester City want derby revenge, says Laporte
Whatever United's plans, they must involve what has been a problem for most Etihad visitors though, and that is staying in the game.

Keystone XL Pipeline Construction Blocked By U.S. Judge
Trump suggested that the government likely would appeal the case to the United States Court of Appeals for the Ninth Circuit. State Department, which concluded the pipeline's impact on the environment would be "negligible to moderate".

California Wildfire Reaches Kim Kardashian and Kanye West's New Home
On Friday on Twitter , Kardashian West confirmed reports that the fire has reached her and husband Kanye West's new property. Alyssa Milano, a Hollywood actress lately known for her #MeToo activism, was also forced to evacuate, apparently in a rush.

Sarah Sanders on Jim Acosta Ban: ‘We Stand by Our Statement’
President, I have one other question on the Russian Federation investigation". "Just sit down", Trump said. Baker wrote that he believes Trump called on Acosta at the presser because "he wants the confrontation".