Thu, 28 Mar 2024 Today's Paper

US Federal Reserve keeps interest rates unchanged

By

22 September 2017 10:54 am - 0     - {{hitsCtrl.values.hits}}

A A A

AFP: The US Federal Reserve kept its benchmark interest rate unchanged this week and announced the gradual end to a crisis-era stimulus programme in a sign the economy is on sound footing.
The Fed statement following its two-day policy meeting noted that the devastation caused by Hurricanes Harvey, Irma and Maria are “inflicting severe hardship” on communities.


However, the central bank said the economic impact of the storm is likely to be felt only in the near term.


It cited past experience which has shown that “the storms are unlikely to materially alter the course of the national economy over the medium term.”


Higher prices for gasoline and some other items “in the aftermath of the hurricanes will likely boost inflation temporarily”.


However, 12-month inflation is still expected to remain below the Fed’s two percent goal in the near term, stabilizing at the target rate only in the medium term.


The Fed gave few hints on the likelihood of a third rate increase this year, as the statement was little changed from the prior versions, so analysts will have to watch for Fed Chair Janet Yellen’s post-meeting press conference for further indications.


The committee did say that despite the hurricane impact, the Fed “continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, and the labor market will strengthen somewhat further.”


But that language too was nearly identical to the prior statements.


Despite nearly seven years of uninterrupted job creation and a very low unemployment rate of 4.3 percent, inflationary pressures and wage gains have been tepid at best, something that has baffled economists given the strong labor market.


But with inflation finally showing signs of life in August, more analysts now see an increased chance of a rate increase in December.


The central bank also confirmed that it will end an unprecedented stimulus programme launched at the height of the financial crisis, when the Fed had cut rates to zero and had no ammunition left to help support the economy.


The plan starting next month will gradually reduce the size of the Fed’s US $ 4.5 trillion in investment holdings, which were built up during the financial crisis.

 


Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

  Comments - 0

Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment





Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

VAT increase: SOUNDs death knell for publishers, readers

Though the Government imposed VAT (Value Added Tax) on vegetables and other e

How female change-makers are driving Sri Lanka’s energy saving platform

Saving energy has become more of a responsibility than a habit in today’s c

A dull Ramadan awaits Muslims amidst the Soaring Cost of Living

In the coming days, Muslims across the world will welcome the Holy Month of R

New wildlife underpass to curtail HEC

As of February 2024, Sri Lanka lost another 38 elephants as a result of the H