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The Federal Reserve says it won’t be raising interest rates following its November meeting.
The meeting of the Federal Open Market Committee took place last week, before the announcement Thursday that it will not raise the federal funds rate. The committee said it has decided to maintain its target range of between 2 and 2.25 percent.
Interest rates have already been raised three times this year, first in March, then in June and again in September. And although the FOMC has decided not to raise rates again at this time, it’s likely to carry out an increase in the near future.
“The committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2% objective over the medium term,” the FOMC said in a statement. “Risks to the economic outlook appear roughly balanced.”
The FOMC added that it expects economic activity to rise as the labor market strengthens. It add that longer term inflation is also likely.
The statement overall reflected little change in the Fed’s outlook for the economy since its last policy meeting in September. Inflation remained near its 2 percent target, unemployment fell, and risks to the economic outlook were still felt to be “roughly balanced.”
Policymakers, however, took particular note of the moderation in business investment, an important component of GDP that can spin off jobs as companies build new facilities, and raise productivity as they upgrade equipment and processes.
“Overall, the statement suggests that the Fed is still on track to continue raising interest rates gradually, with the next hike coming at its December meeting,” Capital Economics Senior Economist Michael Pearce told HousingWire. “We anticipate that will be followed by two rate hikes in the first half of 2019. By the middle of next year, however, we expect economic growth to slow below its potential pace, which would force the Fed to the sidelines.”
