US Fed begins final day of meeting on crucial rate decision

Washington: The Federal Reserve opened the final day of deliberations Thursday on a crucial interest rate increase that has left global markets and economic policy makers on edge for weeks. 

After locking its benchmark interest rate at zero percent for nearly seven years, the Fed must decide whether the US and global economies are strong enough to weather a modest hike. A decision is expected at 1800 GMT.

Supporters of an increase say the US economy has gained enough strength to begin moving the Fed away from its extraordinary crisis-era policy of easy money to a more normal policy stance.

But so-called rate doves say the economy, and especially the labor market, still display weaknesses and that the global slowdown poses risks to the US that merit keeping the federal funds rate where it has stood since 2008, at 0-0.25 percent.

"Whatever today`s decision, the pace of rate increases from here will be slow and cautious and the final destination will be extraordinarily low relative to the peaks we have seen in the last 40-odd years," said Kit Juckes of Societe Generale.