Fed keeps interest rates steady, doesn’t indicate when next raise may come

Central bank had penciled in three quarter-rate hikes for 2017
February 01, 2017 04:51PM

Janet Yellen

Janet Yellen

The Federal Reserve decided not to raise interest rates Wednesday. And while officials said they’re on track to gradually raise short-term rates this year, they gave no indication about when they will start.

Officials voted unanimously at the end of their two-day policy meeting to hold the benchmark interest rate in between the current .5 percent to .75 percent range that was set when the Fed lifted rates by a quarter point in December, the Wall Street Journal reported.

Late last year, the central bank said it would most likely raise rates in 2017 in three quarter-point increments, and gave no indication Wednesday that the policy had changed.

Officials said in a statement described the risks to their outlook as “roughly balanced,” meaning they think it’s just as likely that the economy will perform better than they’ve projected as it is likely to underperform.

They said they will continue to “closely monitor inflation indicators and global economic and financial developments.”

The Fed is slated to meet again on March 14. Inflation moved to 1.6 percent in December, closer to the Fed’s 2 percent target. Some insiders think President Donald Trump’s plan to slash taxes and increase spending could push the economy to grow faster than projected, which could raise inflation and force the Fed to raise rates too quickly. [WSJ] – Rich Bockmann