The Federal Reserve left short-term interest rates unchanged, saying it is still waiting for more evidence of economic progress and signaling that an increase is still likely in the year-end.
“Near-term risks to the economic outlook appear roughly balanced,” the Federal Open Market Committee said in its statement Wednesday after a two-day meeting in Washington. “The Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives.”
The Fed had kept the rates unchanged for the sixth consecutive meeting. The U.S. central bank fell that it is still not a good time to lift rates when inflation is still below its 2 percent goal and the unemployment rate is holding steady at a low level.
However, an increase in December is still possible. Forecasts released by the Fed showed 10 of 17 officials expected by December to raise the central bank’s benchmark federal-funds interest rate by a quarter percentage point to a range between 0.5% and 0.75%. Three officials don’t see a move at all this year.
Stock rose after the Fed’s decision. The S&P 500 Index closed trading at 2,163.09 in New York. The yield on the U.S. 10-year note fell two basis points to 1.67 percent, according to Bloomberg Bond Trader data.
“You’ve got one sort of near-term risk factor off the table for investors, and markets like certainty,” Mike Bailey, director of research at FBB Capital Partners, which manages about $900 million, said by phone. “The market overall was pretty confident you wouldn’t see a rate increase today and we saw that achieved.”