The Federal Reserve to Hold Interest Rates at Current Level

March 18, 2016 by NASB

federal reserve to hold interest ratesEvidence of a stronger U.S. job market, increased inflation and concerns about the global economic picture led to Wednesday’s decision by the Federal Reserve to keep short-term interest rates at their current level.

 

In addition to holding steady, The Fed announced plans to cut projected rate-hikes from four in 2016 down to two.

 

“Fed officials still sound uncertain about the economic outlook and the global environment,” the Wall Street Journal’s Sudeep Reddy said following the announcement. “Economists expected this but markets still love it, rallying on the news.”

 

In addition to lowering expectations on the number of rate hikes, the Fed also lowered 2016 inflation estimates from 1.6% to 1.2%.

 

“In other words, the U.S. economy will be weaker than it otherwise would have been because of the turmoil overseas,” Greg Ip said. He added that it will be among company with the IMF, especially with European and Japanese Central Banks expected to be “less vigorous” than in previous months.

 

The Fed will meet again in April to discuss the domestic and global economic outlook. Many economists predict a rate hike will happen later this year, according to the WSJ report. The expected increase will be gradual, in line with the 0.25%-0.50% hike in December.

 

For some bonus advice on how you can play the Federal Reserve’s decision in your favor, check out NASB’s report on exercising Credit Fitness. A healthy wallet is a happy wallet.

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