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Fed leaves interest rates unchanged
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Fed leaves interest rates unchanged

Views:0     Author:Site Editor     Publish Time: 2020-01-03      Origin:Site

The Federal Reserve left borrowing costs unchanged at its last policy meeting of the year on Wednesday and signaled that policymakers saw no need to boost the economy further anytime soon.

The central bank predicted that current interest-rate levels could keep the record-long expansion humming for now, even against a backdrop of cooling global growth and ongoing trade disputes. Those strains had prompted policymakers to reverse course this summer and pursue stimulus measures for the first time since the financial crisis.

The policy-setting Federal Open Market Committee said it would "continue to monitor the implications of incoming information for the economic outlook" and removed a reference to "uncertainties" that had been included in previous statements.

The pause is likely to draw ire from President Donald Trump, who has regularly pressured the FOMC to take steps to juice growth ahead of his reelection bid in 2020.

Policymakers lowered the benchmark interest rate three times this year, to a target range of 1.5% to 1.75%, which appeared to help stabilize an outlook that had become increasingly uncertain. The unemployment rate fell to its lowest level in half a century last month, and consumers have continued to spend at a robust pace.

"The US economy — with a little monetary policy support — is proving resilient," said Josh Wright, the chief economist at iCIMS, a recruiting-software firm. "Hikes are out of the question right now, but it's hard to make a case for further cuts. We have a number of months to see how trade negotiations go and how prior rate cuts filter through the economy."

But growth is expected to continue to slow in the coming months, particularly as Trump escalates a tit-for-tat economic fight with China. The US is scheduled to hit the second-largest economy with more than $100 billion worth of additional tariffs on Sunday, effectively targeting all products imported from there.

The White House has separately threatened to increase duties on allies in the European Union and South America, leading to sharp slowdowns in manufacturing activity and business investment.

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