WASHINGTON (June 16, 2016) — Uncertain U.S. economic conditions have led the Federal Reserve to keep a key interest rate at a very low level, according to the latest statement from the Fed's Federal Open Market Committee.
The federal funds rate — the rate at which banks lend to other banks — will stay at ¼ to ½ percent for the time being, the FOMC announced June 15.
Since its last meeting in April, the committee said, labor market improvement has slowed even as economic activity picked up.
The housing sector has improved and the drag from net exports appears to have lessened, but business fixed investment has been soft, according to the FOMC.
“The committee currently expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market indicators will continue to strengthen,” the FOMC said in a press release.
The FOMC said it expects inflation to remain low for the time being, partly because of low energy prices earlier this year. However, it expects the inflation rate to rise to its goal of 2 percent as the labor market strengthens and the effect of previous declines in energy and import prices dissipates.