Federal Reserve chair Janet L. Yellen said Wednesday that the U.S. central bank's decision to again leave key interest rates unchanged is rooted in economic performance and the near term outlook -- not politics, as has been claimed by Republican presidential candidate Donald Trump. The Fed declined to raise the federal funds rate at the end of its two-day policy meeting on Wednesday, citing various market signals. The Fed will meet again on Nov. 1-2. File Photo by Kevin Dietsch/UPI | License Photo
WASHINGTON, Sept. 21 (UPI) -- After weeks of speculation that interest rates may be on the rise, the U.S. central bank on Wednesday decided that won't be the case -- at least for a few more weeks.
At the conclusion of its two-day meeting Wednesday, the Federal Reserve opted to leave key rates unchanged for the sixth straight time this year.
"The Committee decided to maintain the target range for the federal funds rate at 1/4 to 1/2 percent," the bank's Federal Open Market Committee said in a statement, maintaining the rate it established in December.
Domestic indices have taken a roller coaster ride in recent weeks, in part based on some speculation that the Fed would raise the federal funds rate at this month's policy meeting. That speculation was primarily based on two board members remarking that perhaps now is the time to raise rates again.
In the end, though, the Fed wasn't sufficiently satisfied that hiking rates would help the economy. As with previous decisions, sub-2 percent inflation appears to be the main contributing factor.
"The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation," the FOMC said.
Fed chair Janet Yellen said in a news conference that the panel's decisions are based entirely on key economic factors -- and not political purposes, as Republican presidential candidate Donald Trump has claimed.
In fact, Yellen even suggested that she's not yet sure how long the Federal Reserve can continue to avoid pulling the trigger on a rate increase.
"There are risks in waiting too long to [raise rates]," she said. "We need to take a forward-looking approach."
"It's also important that we make sure we get back to 2 percent [inflation]," she continued.
Despite Wednesday's inaction, the Federal Reserve still expects to raise interest rates before the end of the year -- a position the central bank has maintained since the start of 2016.
Perhaps one of the most noteworthy observations from Wednesday's meeting is a slight-but-significant change in the voting.
For several months, nine of the panel's ten members have voted to leave rates alone, with the consistent dissenter being Kansas City Federal Reserve President Esther L. George. Wednesday, though, two more board members joined George in the minority -- Loretta J. Mester and Eric Rosengren, Federal Reserve Bank presidents in Cleveland and Boston, respectively.
All three dissenting members voted to raise the target range for the federal funds rate to between 1/2 and 3/4 percent.
"My personal view, based on data that we have received to date, is that a reasonable case can be made for continuing to pursue a gradual normalization of monetary policy [and raise rates]," Rosengren said earlier this month.
George, who believes the Fed may be choking economic growth by keeping rates low, has voted against the majority at every meeting but two since she joined the board in 2011.
"For me it is really beginning to move slowly and on a path that allows this economy to adjust and put rates closer to where the economy is performing," she said in April. "This is not a time to try to cool an overheated economy."
The Federal Reserve's next policy meeting will be held Nov. 1-2.