The Federal Reserve is keeping US interest rates at record lows in the face of persistent threats from a weak international economy and excessively low inflation.
Fed officials said today that the US economy is still expanding modestly. But in a nod to recent weaker data, they said in a statement that the pace of job gains had slowed, an indication that they may be concerned about the pace of hiring.
At the same time, the policymakers sounded less gloomy about global economic pressures. They removed a sentence from their September statement that had warned about global pressures after news of a sharper-than-expected slowdown in China.
The Fed offered little clarity on the likely timing of a rate hike. Some Fed officials have signaled a desire to raise rates before year's end. But tepid economic reports have led many analysts to predict no hike until 2016.
The decision, after the Fed's latest policy meeting, was approved on a 9-1 vote, with Jeffrey Lacker, president of the Fed's Richmond regional bank, dissenting. As he had in September, Lacker favored a quarter-point rate hike.
The Fed has kept the target for its benchmark funds rate at a record low in a range of zero to 0.25 per cent since December 2008.
Yellen and some other Fed officials have said a rate hike is still likely by the end of this year. But many analysts point to a string of weaker-than-expected economic reports in recent weeks that they think will lead the Fed to delay any rate increase until 2016.
What's changed is a global economic slowdown, led by China, that's inflicted wide-ranging consequences. US job growth has flagged. Wages and inflation are subpar. Consumer spending is sluggish. Investors are nervous. And manufacturing is being hurt by a stronger dollar, which has made US goods pricier overseas.
Though analysts say a rate hike at the central bank's next meeting in December is possible, two key Fed officials have called even that prospect into question.
The Fed cut its benchmark rate to near zero during the Great Recession to encourage borrowing and spending to boost a weak economy. Since then, hiring has significantly strengthened, and unemployment has fallen to a seven-year low of 5.1 per cent.
But the Fed is still missing its target of achieving annual price increases of 2 per cent, a level it views as optimal for a healthy economy.
