WASHINGTON (July 29, 2016) — The Federal Reserve's Federal Open Market Committee (FOMC) will keep a key federal interest rate at 0.25 to 0.5 percent for the time being, the FOMC announced at its latest meeting.
Economic conditions are not yet right for further increases in the federal funds rate — the rate at which banks lend to other banks — the committee said July 27 after its most recent meeting.
The economy continues moderate growth, according to the FOMC, and employment had a growth spurt in June after a weak May.
“Household spending has been growing strongly, but business fixed investment has been soft,” it said. Earlier declines in energy prices, as well as prices of non-energy imports, have kept inflation below the committee's 2-percent threshold.
The committee said it expected both inflation and labor market activity to increase over the medium term.
“Near-term risks to the economic outlook have diminished,” it said. “The committee expects that economic conditions will evolve in a manner that will warrant only gradual increases to the federal funds rate.”