Members of the Federal Open Market Committee decided to keep the federal funds rate at zero to 0.25%, they announced Wednesday at the end of a two-day meeting in Washington.
The vote was unanimous.
“The committee will assess progress — both realized and expected — toward its objectives of maximum employment and 2% inflation,” before deciding on a rate hike, they said in a statement.
In addition to looking for labor market improvement and inflation trends, the statement said members will continue to read “financial and international developments,” and even then, expect to keep the rate below normal “for some time." The statement noted moderate growth in household spending and the housing sector, but weakness in business fixed investment and net exports.
The statement left the risk outlook unchanged, said Sam Diedrich, portfolio manager for fixed-income relative value strategies at hedge funds-of-funds manager Pacific Alternative Asset Management Co.
“The curve is a little bit steeper (but) the market clearly wasn't wowed by this statement. The market had been pricing in a hike in December,“ Mr. Diedrich said. With inflation a key determinant, “all in all, unless there's a big surprise to inflation data, I think you're looking at a December, or later, hike.”