FED Expects to Hold Rates Steady as Job Hiring Slowed Down

As the U.S. hiring slowed down and the possibility that Britain exiting from the EU, the Federal Reserve is expected to keep interest rates unchanged on Wednesday.

In December, the Fed raised its key lending rate by 25 basis points for the first time in nearly a decade. However, it has backed away from further monetary policy tightening though the Chairwoman, Janet Yellen, implied several times that there will be a raise this year. The pause is largely due to a global economic slowdown and financial market volatility.

In March, the Fed pointed out two rate rises in 2016, but a weak job report in May doubted the economic outlook.

The targeted overnight lending rate is forecast to remain in the current range of 0.25 percent to 0.50 percent, according to a poll from Reuters.

“We shouldn’t expect the Fed to be prepared to send a clear signal about a timing of rate hikes,” said Roberto Perli, an economist at Cornerstone Macro.

“With the unemployment rate at 4.7 percent, wage growth clearly picking up, and financial conditions much easier, there is likely a limit to how long the Fed’s pause can last,” Goldman Sachs economists Jan Hatzius and Zach Pandl wrote in a recent note to clients.

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