Federal Reserve leaves rates on hold
A late PS: America’s central bank has voted to leave US interest rate on hold.
Federal Reserve policymakers have agreed unanimously to maintain US interest rates at the current level of 5.25% to 5.5%.
Announcing the decision, the Fed’s FOMC committee say:
Recent indicators suggest that economic activity has been expanding at a solid pace. Job gains have slowed in recent months but remain strong, and the unemployment rate has remained low. Inflation remains elevated.
The U.S. banking system is sound and resilient. Tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain. The Committee remains highly attentive to inflation risks.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. The Committee will continue to assess additional information and its implications for monetary policy.
But, significantly, the Fed also still expects to raise interest rates by a quarter of one percent by the end of the year.
That’s according to the ‘dot plots’, where Fed policymakers estimate where they think rates will be in future.
The Fed dot plot: pic.twitter.com/itokke17K2
— The Transcript (@TheTranscript_) September 20, 2023
Time to wrap up… here are today’s main stories:
Our Politics Live blog will be tracking Rishi Sunak’s u-turn on the UK’s net zero plans, with a speech due to start shortly…
We’ll be back tomorrow, with live coverage of the Bank of England’s knife-edge decision on UK interest rates, due at noon sharp.
Currently, the City money markets are indicating that ‘no change’ is a 53% chance, with a 47% possibility of another rate hike.
GW
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