Fed keeps key rate same, sees more hikes ahead

The Denver Post - - BUSINESS - By Martin Crutsinger

WA SHINGTON» The Fed­eral Re­serve has left its key pol­icy rate un­changed but sig­naled that it plans to keep re­spond­ing to the strong U.S. econ­omy with more in­ter­est rate hikes. The next rate in­crease is ex­pected in De­cem­ber.

The Fed kept its bench­mark rate in a range of 2 per­cent to 2.25 per­cent.

A state­ment it is­sued Thurs­day af­ter its lat­est pol­icy meet­ing por­trayed the econ­omy as ro­bust, with healthy job growth, low un­em­ploy­ment, solid con­sumer spend­ing and in­fla­tion near the Fed’s 2 per­cent tar­get.

De­spite a U.S. trade war with key na­tions, weaker cor­po­rate in­vest­ment and a slug­gish hous­ing mar­ket, the Fed is show­ing con­fi­dence in the econ­omy’s re­silience.

To help con­trol in­fla­tion, it has pro­jected three rate in­creases in 2019 af­ter an ex­pected fourth hike of the year next month.

An­a­lysts saw the cen­tral bank’s de­ci­sion to high­light the econ­omy’s strength and to make few changes in its pol­icy state­ment as a sign that it re­mains on track to raise rates next month.

“The Fed’s eco­nomic as­sess­ment re­mains very up­beat, not­ing de­clin­ing un­need?” em­ploy­ment and con­tin­ued strong growth,” said Greg McBride, Bankrate.com’s chief fi­nan­cial an­a­lyst. “All signs point to a rate hike at the De­cem­ber meet­ing.”

The Fed’s de­ci­sion Thurs­day was ap­proved 9-0 by its vot­ing pol­i­cy­mak­ers.

Its brief state­ment was nearly iden­ti­cal to the one the Fed is­sued in Septem­ber. It said the job mar­ket has con­tin­ued to strengthen and noted that eco­nomic ac­tiv­ity has been ris­ing “at a strong rate.”

In one of its few changes, the Fed down­graded its as­sess­ment of busi­ness in­vest­ment spend­ing, ob­serv­ing that it had slowed from its pace ear­lier in the year.

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