Federal Reserve Holds Interest Rate Near Zero
This afternoon, the Federal Open Markets Committee, the board of the Federal Reserve that determines monetary policy and interest rates, announced it has decided to keep the target federal funds rate between 0.0 and 0.25 percent, as expected.
The language in the statement was virtually identical to that in last month’s, indicating no change in Fed policy. All of the FOMC members voted to keep rates the same, save for Federal Reserve Bank of Kansas City President Thomas Hoenig, a vocal inflation hawk who has voted for rate increases at the past two meetings. The minutes say Hoenig believes that keeping interest rates low for “an extended period” is “no longer warranted because it could lead to a build-up of future imbalances and increase risks to longer run macroeconomic and financial stability.”