TOP NEWS: Federal Reserve Holds US Interest Rates; Positive On Economy

WASHINGTON (Alliance News) - The US Federal Reserve on Thursday left its benchmark interest rate ...

Alliance News 8 November, 2018 | 7:32PM
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WASHINGTON (Alliance News) - The US Federal Reserve on Thursday left its benchmark interest rate unchanged in light of low unemployment and strong economic growth.

The Fed's policymakers said the current target range of 2.0% to 2.5% for federal funds would be maintained.

Based on data received by the Federal Open Market Committee since its September meeting, the committee said the labour market has continued to strengthen and that economic activity has been rising at a strong rate.

The unemployment rate was 3.7% in October, the government said last week, while gross domestic product remains on target to hit 3% this year, according to statistics released late last month.

"Job gains have been strong, on average, in recent months, and the unemployment rate has declined," a committee statement said. It also said household spending has continued to grow strongly, while growth of business fixed investment has moderated from its rapid pace earlier in the year.

The committee also noted that over the past 12 months overall inflation and inflation for items other than food and energy remain near 2%.

The Fed has raised rates three times this year in a bid to hold off inflation as the US economy enjoys strong growth. In September the committee signalled plans to stay the course until December, followed by several more hikes in 2019.

President Donald Trump has repeatedly lashed out at the independent central bank, saying the rate increases are coming too fast and could choke growth.

"My biggest threat is the Fed," Trump said when asked last month what the biggest threat was to his presidency.

In the interview with Fox Business, he complained that the Fed "is raising rates too fast, and it's too independent."

In December 2015, the Fed began moving away from the near-zero benchmark maintained since the depths of the financial crisis. For US consumers the rate affects borrowing costs, such as mortgage and credit card payments.

Copyright dpa

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