NEW YORK (Reuters) - The U.S. Federal Reserve on Wednesday held interest rates steady and signaled borrowing costs are likely to remain unchanged indefinitely, with moderate economic growth and low unemployment expected to continue through next year’s presidential election.
“Our economic outlook remains a favorable one, despite global developments and ongoing risks,” Fed Chair Jerome Powell said in a news conference following the decision. “We believe monetary policy is well positioned to serve the American people by supporting continued economic growth, a strong job market and inflation near our 2% goal.”
HIGHLIGHTS:
** Fed keeps target interest rate unchanged at 1.50-1.75%, sees no change in rates in 2020
** Fed maintains interest on excess reserves rate at 1.55%
** Fed says judges that current stance of monetary policy is appropriate to maintain U.S. economic expansion and inflation and employment goals
** Fed drops language from prior statement that ‘uncertainties about this outlook remain’
** Fed vote in favor of policy was unanimous
** Powell says the Fed is strongly committed to achieving symmetric inflation goal
** Powell says Fed stands ready to adjust repo operations to keep federal funds rate in range
** Powell says the Fed is open to potential repo market changes that do not threaten safety and soundness
** Powell says Fed’s framework review is looking to strengthen credibility of inflation target
MARKET REACTION:
STOCKS: U.S. stocks extend slight gains, with the S&P 500 .SPX last 0.35% firmer. BONDS: The 10-year U.S. Treasury note US10YT=RR yield rose slightly then slipped to 1.7896%, and the 2-year yield US2YT=RR eased to 1.6133%.
FOREX: The
