The Federal Reserve United States (Fed) opted for the status quo, Wednesday, March 16, and decided not to raise interest rates. She relies on “risks” posed by the global economic situation.
At the end of two days of meetings in Washington, the Monetary Policy Committee decided to maintain the rate of interest in their current range between 0.25% and 0.50%, in line with market expectations
at its previous meeting in late January, the Fed had already chosen to take a break in the normalization of its monetary policy after rising a quarter point interest rates in December for the first time in almost ten years.
to justify this new access of caution, the Fed strongly emphasizes the turmoil in global markets, fueled by the economic slowdown in China, the soft stroke of the other major emerging countries of the world and fall of commodity prices, including oil. “The global economic and financial situation continues to pose risks” write the members of the Monetary Policy Committee in their statement, a new terminology that reflects a growing concern since their meeting in late January.
In determining whether a new monetary tightening is needed in the coming months in the United States, the Fed also repeated that it “assess” including developments in the world.
the Fed opts for this wait-at a time when its Japanese and European counterparts especially strengthen their monetary policies accommodative to support a sluggish activity. The European Central Bank has just increased its purchases of bonds and adopt negative rates in the hope of releasing the credit cords.