Federal Reserve Leaves Interest Rates on Hold, Signals No Change in 2020

The Federal Reserve left interest rates unchanged and signaled it would keep them on hold through 2020 amid a solid economy, sticking to the sidelines during an election year.

“The committee judges that the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation near the committee’s symmetric 2% objective,’’ the Federal Open Market Committee said in a statement Wednesday following a two-day meeting.

The Treasury 10-year yields fell below 1.8%, the dollar declined and U.S. stocks edged higher as investors digested the news and comments during a post-meeting press conference by Chairman Jerome Powell. These included his observation that the committee might consider widening reserves management-related Treasuries purchases to include coupon-bearing securities, if necessary, to ease liquidity strains in money markets. #Fed #FederalReserve #InterestRates

The Fed, in its first unanimous vote since May, said it will continue to monitor the implications of data for the economic outlook “including global developments and muted inflation pressures.” Officials also removed an earlier reference to “uncertainties” remaining about the outlook.

Powell reinforced the message, telling reporters that “the current stance of monetary policy will likely remain appropriate” provided incoming information continued to confirm the committee’s economic outlook.

“Both the economy and monetary policy right now are in a good place,” he said.

Policymakers had been widely expected to leave the target range for the federal funds rate at 1.5% to 1.75% after three straight cuts that helped calm concerns the economy could falter.

Officials forecast their policy remains supportive of growth in coming years -- even with the U.S. and China yet to reach a trade deal, Brexit’s future in question ahead of Thursday’s U.K. election and a lackluster global economic picture.

The FOMC repeated in its statement that economic activity has been rising at a “moderate’’ rate with “solid’’ job gains.

The record-long U.S. economic expansion is in its 11th year, a run that has driven unemployment to the lowest level since 1969 even while failing to sustainably deliver inflation at the Fed’s 2% target.

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