US Federal Reserve Abstains from a Rate Hike
The U.S. Federal Reserve left its policy interest rate unchanged at 0.3% pa. After a divided vote the Federal Open Market Committee (FOMC) decided to await more evidence of progress toward its goals, while hinting that a new rate hike is still likely by the end of 2016. The sixth straight hold extends U.S. central bankers’ abstain from further action amid risks from abroad and inconsistent signs of economic strength. Interest rate hike in 2016 will depend on how the economy, inflation and markets fare in the months surrounding a contentious presidential election.
Although the unemployment rate is little changed in recent months, job gains have been solid, on average. Household spending has been growing strongly but business fixed investment has remained soft” the Fed said in its statement. Stock and US Government Treasuries climbed after the decision, while the dollar declined against most of its major peers and gold rallied.
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