US Fed keeps interest rates unchanged

US Fed keeps interest rates unchanged

Washington, July 28 (IANS) US Federal Reserve on Wednesday kept federal funds rate unchanged, reiterating that it continues to closely monitor inflation indicators and global economic and financial developments.

“Near-term risks to the economic outlook have diminished,” said the Fed in a statement after concluding two-day monetary policy meeting, Xinhua news agency reported.

This new expression might indicate that conditions are getting more favorable for further interest rate hikes in the future.

Fed officials gave more upbeat description of the economy. There was some increase in labor utilisation in recent months, pointing to a healthy labor market despite the slowdown in April and May. Household spending have grown “strongly.”

Inflation continues to run below the Fed’s 2 per cent target, a major concern for Fed officials. But they expected inflation to rise to the target over the medium term as the transitory effects of past declines in energy and import prices dissipate and the labor market strengthens further.

While Fed policymakers said they continued to closely monitor inflation data and global economic and financial developments, the improved job and consumption data eased Fed officials concerns over the economy’s near-term risks.

The Fed raised its target range for the federal funds rate to 0.25 per cent to 0.5 per cent in December last year, the first rate hike in nearly a decade, marking the end of an era of extraordinary easing monetary policy.

But the turmoil in financial markets and a slowdown in global economy since the start of the year have raised increased concerns about the strength of the US economy, forcing Fed policymakers to hold off on any further rate hikes since then.

US dollar mixed on Fed statement

New York, July 28 (IANS) The US dollar traded mixed against other major currencies on Wednesday as investors were digesting the newly-released Federal Reserve statement after its two-day policy meeting.

In late New York trading, the euro rose to $1.1009 from $1.0986 of the previous session, and the British pound rose to $1.3172 from $1.3143, Xinhua news agency reported.

The Australian dollar went down to $0.7464 from $0.7507.

The dollar bought 105.64 Japanese yen, higher than 104.70 yen of the previous session. The dollar declined to 0.9915 Swiss francs from 0.9926 Swiss francs, and it inched up to 1.3216 Canadian dollars from 1.3202 Canadian dollars.

The US central bank left federal funds rate unchanged in Wednesday’s statement, reiterating that it continues to closely monitor inflation indicators and global economic developments.

“Near-term risks to the economic outlook have diminished,” the Fed said, adding that there was some increase in labor utilisation in recent months and household spending have grown “strongly”.

Analysts said the Fed’s overall description of the economy was upbeat, which might indicate that conditions are getting more favorable for further interest rate hikes in the future.

The dollar index, which tracks the greenback against six major peers, was up 0.04 per cent at 97.193 in late trading.

Leave a Reply

Please enter your comment!

The opinions, views, and thoughts expressed by the readers and those providing comments are theirs alone and do not reflect the opinions of www.mangalorean.com or any employee thereof. www.mangalorean.com is not responsible for the accuracy of any of the information supplied by the readers. Responsibility for the content of comments belongs to the commenter alone.  

We request the readers to refrain from posting defamatory, inflammatory comments and not indulge in personal attacks. However, it is obligatory on the part of www.mangalorean.com to provide the IP address and other details of senders of such comments to the concerned authorities upon their request.

Hence we request all our readers to help us to delete comments that do not follow these guidelines by informing us at  info@mangalorean.com. Lets work together to keep the comments clean and worthful, thereby make a difference in the community.

Please enter your name here