The US Federal Reserve has announced no change to the existing interest rate on June 13, 2018. This decision came as no surprise to most economists, as the Fed had previously stated that they would likely keep rates consistent until they had seen enough stability in economic trends.
In the statement released by the Fed, leaders emphasized the current state of the country’s economy and their expectations for the future. They stated that, “Growing overall employment and a strong job market have contributed to evidence of increasing economic activity and strong consumer spending. However, inflation remains below the long-run objective,” referring to the 2 percent target they strive to achieve. The central bank’s decision was also based on the potential risks of economic bloating, which could be caused by too many hikes in a short period of time.
Despite the lack of change, the Fed left the door open to potentially increase rates in the near future. This was a statement of confidence from the reserve, as it means that they feel their efforts to strengthen the U.S. economy have traction. This decision will affect the future of the stock market, along with banking rates, consumer prices and numerous other economic conditions.
Overall, the Federal Reserve is doing a commendable job of managing the economic stability of the country. Although they’ve decided to keep the rates as they are, they’ve made it clear that they are open to increasing the rate if the economy begins to show signs of inflation. This decision not only allows businesses to plan and prepare for future adjustments, but it also helps generate confidence and trust within the marketplace.