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Federal Reserve Keeps Rates Constant With 'Solid' Economic Growth

January 31, 2019

The U.S. economy is looking up, according to the Federal Reserve's assessment during its two-day meeting earlier this week. As a result, rates went unchanged as the Fed takes a more patient approach when it comes to future changes.

 

“In light of global economic and financial developments and muted inflation pressures, the committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate,” according to a statement released by the Fed. 

 

Despite a lengthy government shutdown and the current tumultuous nature of the U.S. government, the Fed is still optimistic about the economic forecast. In fact, events such as the government shutdown are reportedly influencing the Fed to exercise patience with rate changes moving forward. 

 

"In keeping with the cautious tone, the Fed also said it was ready to slow or even reverse the reduction of its $4 trillion bond portfolio, a sharp move away from its December pledge to reduce its holdings at a steady clip," according to HousingWire.

 

"Interestingly, the committee did not include any language in reference to 'further gradual increases' as it has in the past, signaling to some that a decrease could be on the horizon."

 

To learn more about the Fed's new patient approach and the economy's effect on its decision, click on the image above.

 

 

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