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The Federal Reserve on Wednesday decided to pause its rate hikes as it monitors inflation levels. The central bank left its benchmark rate unchanged at 2.25-2.5 percent, citing “muted inflation pressures.”
The move will come as welcome news to investors, who have been concerned about a global economic slowdown due to weakening growth indicators and fears of trade wars. The decision will help keep borrowing costs low for consumers and businesses.
“In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes,” the Federal Reserve said in a statement.
The Federal Reserve had been gradually raising the benchmark rate for more than two years, but it had been on hold since December 2018 amid signs that inflation was weakening. The central bank can now afford to wait and assess how economic conditions develop before making any further decisions on interest rates.