Fed leaves key interest rate unchanged amid lackluster economic growth
Source: The Washington Post
By Ana Swanson May 3 at 2:02 PM
The Federal Reserve left its influential interest rate unchanged at the conclusion of its two-day meeting in Washington on Wednesday, citing a recent slowdown in growth that it said was likely “transitory.”
A news release acknowledged that the economy has been expanding at a slower pace of late, though it said that the U.S. job market and other indicators of the economy's health continue to be strong. It added that the Fed expects the economy to “evolve in a manner that will warrant gradual increases” in its interest rate, the same language it has used in previous months.
Investors had widely been expecting the central bank to remain on hold this week, given that economic data has been somewhat weaker in the past month and that the Fed still has plenty of time to realize its plan of raising interest rates twice more this year. Markets are more confident of seeing a rate hike in June, when the Fed is scheduled to hold a news conference where it can provide more details on its decision.
Before Wednesday’s announcement, futures markets pointed to only a 4.8 percent probability of a rate hike in May, though a 67.4 percent probability of one in June. The Fed's voting members unanimously decided to leave rates unchanged this week, the release said.
Read more: https://www.washingtonpost.com/news/wonk/wp/2017/05/03/fed-leaves-key-interest-rate-unchanged-amid-lackluster-economic-growth/?utm_term=.a28cf0371876&wpisrc=al_alert-economy&wpmk=1
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