After much speculation and a long-awaited decision—one that had implications for reverse mortgages—the Federal Reserve officially announced today that it will not raise interest rates this month.
The decision to keep rates unchanged was due to a number of factors, including the need to foster maximum employment and price stability, according to a statement issued Thursday by the Federal Open Market Committee (FOMC).
“To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate,” the FOMC said in the statement.
In determining how long to maintain this target range, the Committee said it will assess progress—both expected and realized—toward its objectives of maximum employment and 2% inflation.
This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.
“The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term,” the FOMC said in its statement.
The FOMC comprises 12 members, including seven members of the Board of Governors of the Federal Reserve, the president of the Federal Reserve Bank of New York and four of the remaining 11 Reserve Bank presidents.
Written by Jason Oliva