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Fed holds US rates unchanged
Washington, Dec 10: The US Federal Reserve has held the key federal funds target rate unchanged at a 45-year low of 1.00 per cent and signalled it would keep its stimulative policy for `a considerable period.`
Washington, Dec 10: The US Federal Reserve has held the key federal funds target rate unchanged at a 45-year low of 1.00 per cent and signalled it would keep its stimulative policy for "a considerable period."
The rate decision yesterday had been widely expected by financial markets, but some analysts said the central bank may have been preparing to drop the "considerable period" from its message to prepare for a rise in rates.
Keeping the language is a strong signal that the Federal Open Market Committee does not intend to raise interest rates as soon as March, as the market now anticipates.
The vote was unanimous.
In one change from the Fed's October 28 statement, the central bank suggested that deflation is less of a threat than previously stated.
"The probability of an unwelcome fall in inflation has diminished in recent months and now appears almost equal to that of a rise in inflation," the Fed statement said. In October, the Fed said the threat from weak prices "exceeds" that of inflation.
But the Fed suggested the US economy was not out of the woods despite a sizzling 8.2 per cent growth rate in the third quarter, and suggested it was not eager to raise rates soon.
Bureau Report
Keeping the language is a strong signal that the Federal Open Market Committee does not intend to raise interest rates as soon as March, as the market now anticipates.
The vote was unanimous.
In one change from the Fed's October 28 statement, the central bank suggested that deflation is less of a threat than previously stated.
"The probability of an unwelcome fall in inflation has diminished in recent months and now appears almost equal to that of a rise in inflation," the Fed statement said. In October, the Fed said the threat from weak prices "exceeds" that of inflation.
But the Fed suggested the US economy was not out of the woods despite a sizzling 8.2 per cent growth rate in the third quarter, and suggested it was not eager to raise rates soon.
Bureau Report