The Federal Reserve decided on Wednesday, June 15, 2016 to leave interest rates alone.
Speculation consensus was mostly in line with not raising interest rates. Janet Yellen’s comments were a bit disturbing when she used the term “near normal” to describe the current economic picture of the U.S.
Overal growth in the U.S. is practically flat. Wage growth has stalled and there seems to be a feeling that 2016 will be a bit disappointing. Most economic analysts put growth for 2016 at 2.0%. I am more inclined to think that growth will be between 1.6 and 1.8%.
It seems that the Fed is struggling with an economy that refuses to boom. The decision of the Fed was unanimous among its board.
Yellen suggested adjustments to monetary policy, but did not specify what those adjustemnts are. The Fed remains reactive.
Inflation has remained steady and the labor market has struggled.
The Fed’s posture is to watch and wait.
The Bank of Japan also decided to hold off on increasing rates.
This New York Times article and CNBC were sources for this post.