The Federal Reserve on Wednesday held short-term interest rates unchanged again, while continuing to say the case for higher borrowing costs strengthen further.
“The committee judges that the case for an increase in the federal funds rate has continued to strengthen but decided, for the time being, to wait for some further evidence of continued progress toward its objectives,” the Federal Open Market Committee said in a statement Wednesday.
The Fed had been holding the rates unchanged since last December. Federal Open Market Committee officials postponed the rate hike due to a range of risks in 2016, including concerns about a slowing Chinese economy earlier this year, the U.K.’s Brexit vote in June and uncertainties about the U.S. presidential election next week. The benchmark federal-funds rate now holding at between 0.25% and 0.5%.
“Given the asymmetry of risks, there was little chance they would hike in November, their earliest opportunity and a meeting without a press conference” by Fed Chair Janet Yellen, said Neil Dutta, head of U.S. economics at Renaissance Macro Research LLC in New York. The presidential “election is a secondary consideration, in my view.”
The Fed said it would wait for “some further evidence” of progress and signaled that the case for a December rate hike strengthen. The further evidence includes inflation and job market. The personal-consumption expenditures price index had risen 1.7% in the 12 months, approaching the 2 percent target this year. The fed also said that the “labor market has continued to strengthen and growth of economic activity has picked up.”