The Federal Open Market Committee has opted against raising the federal funds rate for July. As expected, the FOMC kept its overnight interest rate at 0.25 percent despite signs that the labor market has gotten stronger along with other signs indicating growth.
According to the Fed statement released today:
“Job gains were strong in June following weak growth in May. On balance, payrolls and other labor market indicators point to some increase in labor utilization in recent months. Inflation is expected to remain low in the near term and then rise as the decline in energy prices turns and the labor market continues to strengthen. Near-term risks to the economic outlook have diminished.”
Kathy Jones, VP & chief fixed income strategist at Charles Schwab told CNBC-
“The Fed has clearly set the stage for a potential rate hike in September, but they didn’t want to commit themselves. You can tell they’re feeling a bit more confident.”
The decision by the Fed to leave rates alone comes as concerns increase over global growth. In fact, Fitch Ratings today cut its forecast for Fed rate hikes from two to one this year and from three to two next year.
Click here to see what changed in the most recent Fed statement.
Here are the final numbers from Wednesday, July 27th on Wall Street:
Dow Jones Industrial Average: 18,472.17 (-1.58 / -0.01%)
NASDAQ: 5,139.81 (+29.76 / +.58%)
S&P 500: 2,166.58 (-2.60/ -0.12%)