Federal Reserve Leaves Interest Rates Unchanged
The central bank says it is open to a rate hike "at next meeting."
— -- Federal Reserve Chairwoman Janet Yellen said earlier this year that she expects interest rates will rise, but that day has not yet come.
The Federal Reserve said today that it was keeping short-term interest rates near zero, affecting everything from mortgage rates to how much you can save at the bank. Interest rates have been near zero since 2008.
The Fed did announce at the conclusion of its two-day policy meeting that it was open to raising rates at the next meeting in December.
“In determining whether it will be appropriate to raise (interest rates) at its next meeting, the (Fed) will assess progress-both realized and expected-toward its objectives of maximum employment and 2 percent inflation,” the Fed said in its statement.
In today's statement, Fed officials seem less worried about global headwinds, said Jim O'Sullivan, chief U.S. economist with High Frequency Economics, "but the slowing in payrolls in the last two reports has got their attention.”
The unemployment rate in September was 5.1 percent, the Labor Department reported earlier this month, and 142,000 jobs were added that month.
“In the end, the data and the markets will determine action,” Sullivan wrote in a note to investors.
PNC Chief Economist Stuart Hoffman wrote in a note to investors that with today’s announcement, “the door has opened wider for a Fed funds rate hike when the FOMC next meets on December 15 and 16.”
The only person to dissent in today's 9-1 vote was Federal Reserve Bank of Richmond President Jeffrey Lacker, who wanted to raise the federal funds rate by 25 basis points.
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