WASHINGTON (Sputnik) – The Federal Reserve has ended US interest rate cuts after three reductions this year, saying in a statement on Wednesday that strong economic and labor market conditions supported the decision.
“The Committee decided to maintain the target range for the federal funds rate at 1.5 to 1.75 percent”, the US central bank said in the December policy statement by its Federal Open Market Committee. “The Committee judges that the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective”.In assessing the appropriate path for future rate decisions, the central bank said it will continue to monitor the implications of incoming information for the US economic outlook, including global developments and muted inflation pressures.
“Although household spending has been rising at a strong pace, business fixed investment and exports remain weak”, the Federal Reserve statement said. “On a 12‑month basis, overall inflation and inflation for items other than food and energy are running below 2 percent”.It said market-based measures of inflation compensation also remained low, while survey-based measures of longer-term inflation expectations were little changed.
The US economy added 266,000 jobs in November, the Labor Department announced last week, beating market expectations for just 184,000 new jobs.
The unemployment rate fell to a 50-year low of 3.5 percent from 3.6 percent previously, the department said.
Prior to Wednesday’s decision, the Federal Reserve cut rates three times back-to-back between July and October, reducing a quarter percentage point each time.
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