“To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate,” wrote the Federal Reserve Board Thursday afternoon. “In determining how long to maintain this target range, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation.”
The move by the Fed comes as global economic and financial developments are hindering economic activity and keeping a lid on inflation.
Experts leading up to today’s announcement were divided about an interest hike. It appears those warning against the Fed making a move won out.
Carlyle Group founder David Rubenstein led the chorus against raising interest rates.
“The Fed is really the central bank of the world. If the Fed raise rates a little bit, it will have an impact all over the world, particularly in emerging markets," Rubenstein told CNBC earlier this week. “I think the Fed is sensitive to that, and I think therefore the Fed is likely to wait for another month or two to get additional data and probably telegraph [the move] a little bit better than it has now that it's about ready to do it at a particular time."
UBS chairman Axel Weber recently spoke with CNBC about U.S. interest rates. He was far more bullish in his take on the future.
"The underlying economic data in the U.S. warrants a rate hike. The U.S economy can stand it,” said Weber. “The U.S. economy in my view actually needs it medium- to long-term and I'm pretty convinced that the U.S. will see a rate hike, most likely in September.”
For now the song remains the same.
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The Federal Reserve Board announced Thursday afternoon that it’s leaving the Federal Funds rate where it is citing employment and inflation as two main factors for not initiating its first rate hike since 2008.