Fed­eral Re­serve leaves key pol­icy rate un­changed

The Sun News - - Business - BY MARTIN CRUTSINGER

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 hike is ex­pected in De­cem­ber.

The Fed left 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.

The Fed will be mon­i­tor­ing the pace of growth, the job mar­ket’s strength and gauges of in­fla­tion for clues to how the econ­omy may evolve in the com­ing months. The brisk pace of eco­nomic growth – a 3.5 per­cent an­nual rate in the July-Septem­ber quar­ter, af­ter a 4.2 per­cent rate in the pre­vi­ous quar­ter – has raised the risk that in­fla­tion could be­gin ac­cel­er­at­ing.

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