The Federal Reserve is leaving its benchmark interest rate unchanged while signalling further gradual rate hikes in the months ahead as long as the economy stays healthy.
The Fed’s decision left the central bank’s key short-term rate at 1.75% to 2%—the level hit in June when the Fed boosted the rate for a second time this year.
The Fed projected in June four rate hikes this year, up from three in 2017. Private economists expect the next hike to occur at the September meeting.
In a brief policy statement, the Fed notes a strengthening labour market, economic activity growing at “a strong rate” and inflation that’s reached the central bank’s target of 2% annual gains. Officials see economic risks as roughly balanced.
In an email to clients, CIBC chief economist Avery Shenfeld commented, “The wording of the statement was virtually identical to the prior one […]. Nothing for markets to think about here.”
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