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Montevideo, June 20th 2019 - 19:30 UTC

 

 

Fed leaves rate unchanged and is “closely monitoring global economic and financial developments”

Thursday, January 28th 2016 - 06:41 UTC
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“The committee is closely monitoring global economic and financial developments and is assessing their implications for the labour market and inflation,” it said. “The committee is closely monitoring global economic and financial developments and is assessing their implications for the labour market and inflation,” it said.
Oil prices continued to fall this month, hitting 11-year lows under $30 a barrel amid concerns about slowing growth in China, which has battered global stock markets. Oil prices continued to fall this month, hitting 11-year lows under $30 a barrel amid concerns about slowing growth in China, which has battered global stock markets.

The United States Federal Reserve said it was “closely monitoring” global economic conditions, but would not raise interest rates in a decision widely expected by most analysts. The central bank said US economic growth had slowed as exports fell because of the strengthening dollar.

 Interest rates remain between 0.25% and 0.5% after being raised for the first time in nearly a decade in December. The Fed issued a statement on Wednesday after a two-day meeting underlining it had been a unanimous decision.

“The committee is closely monitoring global economic and financial developments and is assessing their implications for the labour market and inflation,” it said.

The bank did not signal when it would next raise rates, but did say it expected the US labour market to remain strong and inflation to rise.

The US economy slowed late last year. Unusually mild winter weather hit retail stores, causing holiday shopping sales to be worse than expected.

Oil prices have continued to fall this month, hitting 11-years lows under $30 a barrel amid concerns about slowing growth in China, which has battered global stock markets.

US stock markets fell following the Fed's statement, with the S&P 500 falling 1.3% and the Dow Jones down 1.5%. Oil prices did make some gains on Wednesday; however, with Brent crude reversing earlier falls to $32.40 a barrel, while US oil was up to $31.69.

The Fed is “closely monitoring global economic and financial developments and is assessing their implications for the labor market and inflation, and for the balance of risks to the outlook,” the statement read.

However, the central bank emphasized the resilience of the job market in the wake of a slowing economy. Consumer spending has also remained strong, and government data released Wednesday showed new home sales surged in December, capping what was the best year since 2007.

Still, the Fed said it will assess both the “actual and expected progress” of inflation in setting policy -- cautionary language that suggests the longer inflation remains below target, the more likely the Fed will have to adjust its expectations for raising rates. The Fed also on Wednesday updated its broader policy strategy to indicate that it would be concerned about inflation running both above and below its 2 percent goal.

Categories: Economy, United States.

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