Unchanged Interest Rates

Unchanged Interest Rates

Last Thursday the Federal Open Market Committee failed to change Interest Rates due to the fragility of the American economic expansion since the end of the recession. The Fed’s chairwoman, Janet Yellen told the Associated Press that the Fed would leave Interest rates at 0-.25% target range, which has not changed sine 2008, when America was in the midst of the financial crisis. The decision was made due to inflation running below the long term objective and although it is still expected that downward pressures on inflation will fade over time, uncertainties about our global community fueled the decision. Yellen mentioned that since the end of the recession we have seen unemployment rates decrease, and overall labor market conditions have been on a steady increase in improvement, but economic doubts abroad as well as energy worries kept the Fed from raising rates. 

The Fed has not raised rates in over six years. They had put the interest rate close to zero in order to boost the economy, but many are left to wonder if they will ever raise the rates. The Fed has said that they do expect to raise rates, as it also expects economic growth to continue – and Yellen reaffirmed this on Thursday.

The committee will reconvene in both October and December, and Yellen mentioned that a rate increase was possible at either of those times.

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