US Federal Reserve Keeps Interest Rates Unchanged

The Federal Reserve announced it would hold US interest rates unchanged for at least another month on Wednesday. But the US central bank signaled that the case for an increase later this year had strengthened. "Our decision does not reflect lack of confidence in the economy," chair of the Federal Reserve, Janet Yellen said. But the Fed’s board was split and the decision came as three members of the 12-strong panel voted to raise rates this month. 

"The economy has a bit more running room than might have been previously thought," Yellen said. At the same time, she added she did not "want the economy to overheat" and the case for a rate increase "has strengthened." Yellen pointed out that over the past four months, about 180,000 jobs have been created each month in the US. While job creation continues at a "solid pace" and unemployment remains at 4.9%, where it was in January, 6.1 million people were working part-time but would like to have full-time jobs, a figure higher than the Fed would like, said Yellen. By keeping the rates unchanged, the Fed expected the labor market to continue to improve.

The decision leaves the Fed’s interest rate range at 0.25%-0.50%, where it has been stuck since the Fed raised interest rates last December, the first hike in almost a decade. 

Source : QNA