Fed Leaves Interest Rate Unchanged

The Federal Reserve said Wednesday it kept short-term interest rate unchanged, indicating ‘improved’ sentiment among the business community and consumers.

The Federal Open Market Committee finished a two-day policy meeting with decision to held their benchmark rate at a range of 0.5 percent to 0.75 percent. In December, the Fed lifted interest rate by a quarter percentage point, or 25 basis points for a second time in more than 10 years.

However, the central bank saw some improvements in the economy. “Measures of consumer and business sentiment have improved of late,” the committee said Wednesday. The decision meets investors’ expectation. But the Fed didn’t give hints about when is the next rate hike.

The U.S. economy showed signs of strengthening after Donald Trump won the presidential election in the November. Trump is in favor of policies including tax, infrastructure investment and less regulations, which are expected to boost a slow-growing economy.

“There’s been this dichotomy that’s occurred since the election between measures of sentiment and real activity. There’s been this real animal spirits story,” said Mark Doms, senior economist and managing director at Nomura. “One of the things the Fed is going to be looking for, as well as the market, is whether these animal spirits are going to materialize in a meaningful way.”

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