US Fed holds interest rates steady

According to media reports, the US Federal Reserve (Fed) left interest rates unchanged as expected at 0.25% to 0.50% on January 27. In December 2015, the bank raised its rates by 25 basis points for the first time since December 2008. The bank reported that it is closely monitoring the global economy and financial markets in its ongoing evaluation of the economic outlook for the US.

Although they did not provide detailed forecasts on adjustments in their monetary policy stance, Fed officials stated that the labor market is expected to further strengthen and that the economy is expected to expand. Last month, consumer spending and overall employment increased while the bank implied that it planned to implement a series of gradual rate increases over the next year as the economy continues to gain momentum.

According to Fed officials, the US economy will grow 2.4% in 2016 and the inflation rate will rise from 0.4% in 2015 to 1.6% in 2016 and to 2% by 2018. The unemployment rate will be stable at 4.7% over the next three years.