Menu

The U.S. Federal Reserve left interest rates unchanged at the conclusion today of the meeting of its decision-making organ – the Federal Open Market Committee.

The federal fund rate will remain at subsisting 0 to 0.25 per cent target range.

The Fed warned that recent developments in the global economy and markets may “restrain economic activity somewhat” as well as pushing down inflation in the near term. However, the apex bank left the door open to the possibility of a modest policy tightening later this year.

In what Reuters said amounted to a “tactical retreat”, the U.S. central bank said an array of global risks and other factors had convinced it to delay what would have been the first rate hike in nearly a decade.

"Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term," the Fed said in its policy statement following the end of a two-day meeting. It added the risks to the U.S. economy remained nearly balanced but that it was "monitoring developments abroad."

The Fed has policy meetings in October and December.