The Federal Reserve on Wednesday again declined to raise interest rates.
The central bank’s Board of Governors said in a press release that its Federal Open Market Committee “today reaffirmed its view that the current 0 to 0.25 percent target range for the federal funds rate remains appropriate.”
“Inflation has continued to run below the Committee’s longer-run objective,” the Fed noted.
Last month, in a quarterly survey, 13 out of 17 Fed governors said that a rate increase should occur this year.
The median projected federal funds rate in that survey, however, had fallen from 0.6 percent to 0.4 percent between June and September. Between polls, Chinese financial woes went global—something the Fed alluded to, when it said last month that it wouldn’t tighten the money supply.
“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,” it stated.
Although many observers are expecting the Fed to raise rates at the end of the year, its Board of Governors notes that it continually monitors inflation and unemployment—the problems it has been mandated to simultaneously combat.
“Most FOMC participants, including myself, currently anticipate that achieving these conditions will likely entail an initial increase in the federal funds rate later this year, followed by a gradual pace of tightening thereafter,” Yellen said in September. “But if the economy surprises us, our judgments about appropriate monetary policy will change.”
Read the Fed’s announcement here.
