Federal Reserve Keeps Rates Steady

July 27, 2016

Federal Reserve Keeps Rates Steady Photo

As anticipated, the Federal Open Market Committee (FOMC) kept the federal funds rate steady today with a target range of ¼ to ½ percent. The Committee cited inflation running below its 2% target, moderate domestic economic growth and global economic uncertainty as factors in today’s rate decision.

I expected more hawkish commentary from FOMC members as financial conditions have eased dramatically since the first quarter and risk markets quickly rebounded from their steep sell-off post-Brexit. And this is what I see in the statement. However, with the presidential election season now moving into full swing and disappointing global economic growth, I expect Fed policy to remain on hold for the balance of the year. The FOMC will once again talk the talk for higher rates but ultimately refuses to walk the walk.

Tags: Viewpoints | Federal Reserve | Interest Rate

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