Fed opts not to hike benchmark interest rate

Central bank governors cite sputtering labor market, low inflation pressure

New York /
Jun.June 15, 2016 05:45 PM

The Federal Reserve decided not to raise the fed-funds rate following its meeting Wednesday, with chair Janet Yellen citing “headwinds blowing on the economy.”

The central bank’s governors also signaled slower rate hikes to come, and lowered their forecast of U.S. economic growth. The Fed now anticipates growth of 2 percent in 2016, down from earlier projections of 2.2 percent, according to a new release.

Fed governors’ average predictions still point to two more rate hikes this year, but a larger number of governors than previously predicted there could be just one increase.

 

“We need to assure ourselves that the underlying momentum in the economy has not diminished,” Janet Yellen said at a press conference.

The non-action was largely as expected. Last month, three Fed officials known for their mainstream views suggested it was moderately likely the bank could raise rate, but that was before the Bureau of Labor Statistics released last month’s surprisingly weak employment data. — Ariel Stulberg


Related Articles

arrow_forward_ios
(Getty Images)
Housing affordability is worst on record, data shows
Housing affordability is worst on record, data shows
From left: Federal Reserve chair's Jerome Powell and Starwood Capital Group's Barry Sternlicht (Getty)
Barry Sternlicht calls Fed’s actions “suicide”
Barry Sternlicht calls Fed’s actions “suicide”
(Getty)
Rising mortgage rates could take 20% bite out of home prices
Rising mortgage rates could take 20% bite out of home prices
Fed Chair Jerome Powell (Illustration by The Real Deal with Getty)
Fed hikes interest rates to 14-year high
Fed hikes interest rates to 14-year high
The U.S. housing market sets new record for home sales and prices in July 2020. (iStock)
Moody’s chief economist says housing correction — but not crash — is on the way
Moody’s chief economist says housing correction — but not crash — is on the way
Incoming Federal Reserve vice chairwoman Lael Brainard (Getty Images, iStock/Photo Illustration by Steven Dilakian for The Real Deal)
Biden admin eyes modern update to Community Reinvestment Act
Biden admin eyes modern update to Community Reinvestment Act
Federal Reserve chair Jerome Powell (Getty/Illustration by Kevin Rebong for The Real Deal)
Fed hikes interest rates as inflation concern simmers
Fed hikes interest rates as inflation concern simmers
(iStock/Illustration by Kevin Rebong for The Real Deal)
Flood of single-asset deals propels CMBS market to 14-year high
Flood of single-asset deals propels CMBS market to 14-year high
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...