DECEMBER 16, 2019 – FED LEAVES RATES ALONE AT ITS LAST MEETING OF 2019
After meeting last week, the Fed held interest rates steady and signaled there is no rush to raise them. The Fed lowered rates at their three previous meetings to protect the US economy from the effects of trade tensions and a global slowdown. Fed officials indicated Wednesday they are comfortable with leaving rates where they are, and on hold through the next year while keeping an eye on risks.
“Our economic look remains a favorable one” said Fed Chair Powell. The rate setting committee voted 10-0 to leave rates where they are, in the range of 1.5-1.75%, in the first unanimous vote since May. Officials think rates are currently low enough to stimulate growth, and if their favorable outlook holds, rates could remain unchanged through 2020.
Powell remarked, “As you can see, inflation is barely moving, notwithstanding that unemployment is at a 50-year low – and expected to remain there, and so the need for rate increases is less.” The Fed is in the middle of a year-long review of its inflation-targeting strategy, as inflation has remained under their target since it was adopted 8 years ago.