Fed Balks at Rate Hike

The Federal Reserve is keeping its foot on the brakes, declining once again to authorize a new interest rate hike.

In a statement released this afternoon following the two-day meeting of the central bank’s Federal Open Market Committee (FOMC), the decision to avoid a rate hike even though “the case for an increase in the federal funds rate has strengthened.” Nonetheless, the Fed insisted that it would “wait for further evidence of continued progress toward its objectives” before giving the green light for a new rate hike.

“The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run,” the Fed statement said. “However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.”

Three FOMC members—Esther L. George of the Kansas City Fed, Loretta J. Mester of the Cleveland Fed and Eric Rosengren of the Boston Fed—voted for a rate hike, but were overruled by the other seven FOMC members.