Business

Fed leaves interest rates alone, indicates no changes through 2020

WASHINGTON: The US Federal Reserve left its benchmark interest rate alone on Wednesday and signalled that it expects to keep low rates unchanged through next year.

The Fed's decision follows three rate cuts earlier this year.

It reflects its view that the US economy has withstood the US-China trade war and a global slump and remains generally healthy. Its benchmark rate - which influences many consumer and business loans - will remain in a low range of 1.5 per cent to 1.75 per cent.

In a sign of its confidence about the economy, the Fed's latest policy statement dropped a phrase it had previously used that referred to "uncertainties" surrounding the economic outlook. That suggests the Fed may be less worried about the impact of the US-China trade war or overseas developments.

Financial markets moved slightly up soon after the Fed issued its statement. The Fed appears inclined to leave rates alone through 2020, an election year.

Persistently low inflation with low unemployment has led many Fed officials to conclude that rates can remain lower for longer than they thought without spurring higher prices. Low rates help consumers and businesses afford to borrow and spend. Still, savers have struggled to find returns outside the stock market that can keep them ahead of inflation.

Speaking at a news conference, Fed chair Jerome Powell suggested that even with the pace of hiring solid and unemployment low, he thinks the Fed can further strengthen the job market through a low-rate - or "accommodative" - policy. - AP

BUSINESS & FINANCE