The Federal Reserve’s rate-setting panel has opted to leave interest rates where they’ve been since December.
That means the federal funds rate, the rate at which banks and credit unions lend money to other institutions overnight, stays between 0.25% and 0.5%. The prime rate and rates on home equity lines of credit and credit cards that are tied to the prime will remain flat, while savers won’t see much improvement in the yield they receive on certificates of deposit.
“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,” Fed policymakers say in the statement coming at the end of a 2-day meeting. “The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation.”
Three members of the rate-setting Federal Open Market Committee, or FOMC, wanted a rate hike and dissented from the statement. “Even the cautious Fed is getting antsy to raise rates,” notes Greg McBride, CFA, Bankrate chief financial analyst.
Yellen: No lack of confidence in the economy
“Our current policy should help move the economy toward our statutory goals of maximum employment and price stability,” Federal Reserve Board Chair Janet Yellen explained, at a news conference following the Fed’s announcement.
Bankrate Washington bureau chief and senior economic analyst Mark Hamrick was at the news conference:
Decision follows weak jobs, inflation news
The Fed’s decision comes as inflation remains stubbornly short of the central bank’s 2% target, and after a disappointing employment report that showed 151,000 jobs were created last month, fewer than the 180,000 economists …