Fed Still Not Raising Rates

May 4th, 2015

The Federal Reserve Board released a statement yesterday in response to its recent Federal Open Market Committee (FOMC) meeting.  The Central Bank had indicated earlier this year that it planned to increase the federal funds rate from its current zero to ¼ percent range later in the summer or fall. However, the most recent announcement reflects more hesitation towards increasing interest rates.

The statement cites “economic growth that slowed during the winter months,” and “underutilization of labor resources.”  Recent gross domestic product (GDP) numbers also reveal that the economy grew at a weak 0.2 percent in the first quarter of 2015, compared to 2.2 percent in the fourth quarter of 2014.  These factors will greatly reduce the changes of an interest rate increase at the next FOMC meeting in June.

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