Fed holds off on interest rate hike, downgrades economic forecast

Fed holds off on interest rate hike, downgrades economic forecast
Fed Chairwoman Janet L. Yellen Source: The Washington Times

Federal Reserve policymakers on Wednesday kept the central bank’s benchmark short-term interest rate near zero, opting against the first increase since 2006 after determining the economy still isn’t strong enough to handle it.

Fed officials sharply downgraded their economic forecast for this year. They projected the economy would grow between 1.8% and 2% this year, well below the range of 2.3% to 2.7% in its last forecast in March.

If they’re correct, annual growth would be the worst since 2011 and would be far from the breakout performance some economists had hoped for this year.

In a statement after its two-day policymaking meeting, Fed officials said the economy “has been expanding moderately” after having improved little during the first quarter.

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