The U.S. Federal Reserve said it’s keeping the benchmark interest rate steady, also hinting that there will be no more rate hikes, for the rest of the year. The decision is a reversal from just a few months ago. CGTN’s Giles Gibson has the details.
After a two-day meeting in Washington, the Fed says it’s leaving rates at their current range of 2.25 to 2.5 percent. Last December, the Fed estimated that it would raise rates twice in 2019 – now, they don’t see anymore this year. But the Fed Chairman, Jerome Powell, said he doesn’t see any early signs of a looming financial crisis.
“I would say overall we don’t see financial stability vulnerabilities as high, there are some aspects of the financial markets that we’re carefully marketing, those are in the nature of things that might be amplifiers to a downturn, as opposed to a financial stability concern, which might lead to a financial crisis, which we don’t see,” Powell said.
Early trading on Wall Street was flat ahead of the Fed’s announcement. But U.S. President Donald Trump’s comments about U.S. tariffs on Chinese imports could have been weighing on markets as much as speculation about interest rates.
“No we’re not talking about removing them, we’re talking about leaving them and for a substantial period of time. Because we have to make sure that if we do the deal with China that China lives by the deal,” U.S. President Donald Trump said.
With the U.S.-China trade war on pause as negotiations continue next week, the Fed also says it’s less optimistic than it was about growth in the U.S. economy. Just three months ago, the Fed predicted that the U.S. economy would grow by 2.3 percent.
Now, after a two-day meeting in Washington, the U.S. central bank has cut that estimate down to 2.1 percent, adding to the gloom of disappointing jobs figures at the start of the month.