The FOMC voted today to keep interest rates stable at 0.25%.
Some key points from Janet Yellen’s speech:
- Interest rates kept stable due to global economic growth fears and low inflation.
- Low inflation resulting from transitory factors, such as low oil prices.
- FOMC’s decision is unaffected by market volatility, such as the recent market correction.
- Key focus is on economic indicators, such as the unemployment rate.
- USA economy is growing steadily, creating an environment for raising rates.
- When the first rate rise is triggered the FOMC will exercise pragmatism as to the ‘steepness’ of the subsequent rises, with the usual economic indicators being taken into account.
- Fed remains bias towards a rate hike by 2016 Q1 (13 of 17 policymakers).