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WASHINGTON, (Reuters) – The U.S. Federal Reserve on Wednesday held interest rates steady and signaled borrowing costs are likely to remain unchanged indefinitely, with moderate economic growth and low unemployment expected to continue through next year’s presidential election.

FILE PHOTO: Federal Reserve Board Chairman Jerome Powell testifies before a Senate Banking, Housing and Urban Affairs Committee hearing on the “Semiannual Monetary Policy Report to Congress” on Capitol Hill in Washington DC, U.S., July 11, 2019. REUTERS/Leah Millis

The decision by the U.S. central bank’s rate-setting committee left the benchmark overnight lending rate in its current target range between 1.50% and 1.75%.

New economic projections showed a solid majority of 13 of 17 Fed policymakers foresee no change in interest rates until at least 2021. The other four saw only one rate hike next year.

Notably, no policymakers suggested lower rates would be appropriate next year, a sign the Fed feels it has engineered a “soft landing” after a volatile year in which recession risks rose, the U.S. bond yield curve inverted, and trade policy disrupted markets.

“The Committee judges the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation near the … symmetric 2 percent objective,” the Fed said in a policy statement after the end of a two-day meeting.

There were no dissents to the policy statement, the first without opposition since the April 30-May 1 meeting.

In the midst of an ongoing U.S.-China trade war, Fed policymakers said they would continue monitoring “global developments” in deciding whether interest rates need to change. They also said they would keep an eye on “muted inflation pressures,” a reflection of concern that the pace of price increases has failed to hit the central bank’s target.

Fed Chairman Jerome Powell is scheduled to hold a press conference at 2:30 p.m. EST (1930 GMT) to discuss this week’s policy meeting, the last of the year.

After the Fed’s October policy meeting, Powell said it would take a “material” change in the economic outlook for the Fed to change rates again. The Fed cut rates three times this year, including in October.

The quarterly economic projections released on Wednesday showed little change from those in September, as policymakers sketched out an economy they feel has skirted recession risks and is poised to grow close to trend for several years more.

A reference in the October policy statement to “uncertainties” about the economic outlook was dropped on Wednesday.

Gross domestic product at the median is projected to grow 2% next year and 1.9% in 2021.

Unemployment is seen staying at its current level of 3.5% through next year, rising to only 3.6% in 2021. In a demonstration of the disconnect between that low level of unemployment and inflation, the pace of prices increases is expected to rise only to 1.9% next year.

“The labor market remains strong and … economic activity has been rising at a moderate rate,” the Fed said. It added, however, that business investment and exports remained weak.

The economy will be a central issue in U.S. President Donald Trump’s reelection campaign against a Democratic challenger likely to call for different economic policies. Trump repeatedly criticized the Fed this year for not cutting rates faster and deeper.

The Fed’s forecasts offered little obvious fodder for either Democrats or Republicans, with the economy largely seen performing as it has – far short of the 3% annual growth Trump promised to produce, but also with historically low rates of unemployment.

Reporting by Howard Schneider Editing by Paul Simao howard.schneider@thomsonreuters.com; +1 202 789 8010

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