After the Federal Open Market Committee’s two-day policy meeting, the Federal Reserve has announced it will keep the federal funds rate steady at zero, according to its latest statement.
The committee said that keeping the federal funds rate near zero was appropriate in light of the bank’s goals of maximum employment and 2-percent inflation.
The committee did signal that it will continue to monitor global economic developments in its decision making. "The committee continues to see the risks to the outlook for economic activity and the labor market as nearly balanced but is monitoring global economic and financial developments," the statement said. Their next meeting in December will evaluate these metrics.
Janet Yellen, the chair of the Federal Reserves’s board of governors, signaled that the bank may raise rates later this year, and there is some speculation that rates will go up at the the committee’s December meeting.
"If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this year to raise the federal funds rate target, thereby beginning to normalize the stance of monetary policy," Yellen said in her testimony. "Indeed, most participants in June projected that an increase in the federal funds target range would likely become appropriate before year-end."
The bank has held the federal funds rate near zero for 83 consecutive months since December 2008.
The next committee meeting is scheduled to take place December 15 and 16.