Associated Press Federal Reserve Chair Jerome Powell, left, and Randal Quarles, vice chair for supervision, end last month's board meeting in Washington, D.C. The Reserve announced Thursday that the next interest rate hike is expected in December.
Friday, November 09, 2018 1:00 am
Fed delays rate hike to December
Statement calls the economy robust, touts several factors
MARTIN CRUTSINGER | Associated Press
WASHINGTON – The Federal Reserve has left its key policy rate unchanged but signaled that it plans to keep responding to the strong U.S. economy with more interest rate hikes. The next rate increase is expected in December.
The Fed kept its benchmark rate in a range of 2 percent to 2.25 percent. A statement it issued Thursday after its latest policy meeting portrayed the economy as robust, with healthy job growth, low unemployment, solid consumer spending and inflation near the Fed's 2 percent target.
Despite a U.S. trade war with key nations, weaker corporate investment and a sluggish housing market, the Fed is showing confidence in the economy's resilience. To help control inflation, it has projected three rate increases in 2019 after an expected fourth hike of the year next month.
Analysts saw the central bank's decision to highlight the economy's strength and to make few changes in its policy statement as a sign that it remains on track to raise rates next month.
“The Fed's economic assessment remains very upbeat, noting declining unemployment and continued strong growth,” said Greg McBride, Bankrate.com's chief financial analyst. “All signs point to a rate hike at the December meeting.”
The Fed's decision Thursday was approved 9-0 by its voting policymakers. Its brief statement was nearly identical to the one the Fed issued in September.
It said the job market has continued to strengthen and noted that economic activity has been rising “at a strong rate.”
In one of its few changes, the Fed downgraded its assessment of business investment spending, observing that it had slowed from its pace earlier in the year.
The Fed did not specify any risks to the economy it perceives.