US Fed keeps rates stable, hints at fewer 2016 hikes

According to media reports, the US Federal Reserve kept its main interest rates stable for another month at 0.25% to 0.50%. The bank had raised rates by 25 basis points in December 2015 for the first time in 7 years. The Fed signaled in its report that it still plans to raise rates twice in 2016, although six of the Fed’s 17 policymakers are now predicting only one rate hike for the year.

The Fed reported that they need to see clear signs of a strengthening recovery before lifting rates while concerns about economic growth rates and a weakening labor market are overshadowing their future hike plans. According to the bank, the US economy will grow only 2% this year and in 2017, down 0.1% from their earlier projections.