WASHINGTON (Sept. 18, 2015) — The Federal Open Market Committee (FOMC) of the Federal Reserve has decided for the time being to maintain a key federal interest rate at near zero, as it has for the past nine years.
There was widespread speculation on financial markets that the FOMC might decide at its Sept. 17 meeting to raise the federal funds rate — the interest rate at which banks lend to other banks — from its longtime level of 0 to ¼ percent.
General economic improvements led some observers to predict the committee would raise that key rate. Others were more doubtful, however, citing economic trouble in China and resulting downturns in world financial markets.
In any case, the FOMC issued a report the afternoon of Sept. 17, saying it felt that maintaining a near-zero federal funds rate for the time being is “appropriate.”
The FOMC said it would continue to assess progress in its twin goals — 2-percent inflation and maximum employment — in determining when to raise the federal funds rate.
“This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments,” the committee said.
Despite the economic downturn in China and market instability, FOMC committee said, economic activity should continue to grow at a moderate pace. However, downward pressure on inflation should continue in the near term.