Finance

Finance

Fed keeps key rates unchanged

16 March 2016 21:42 (UTC +04:00)

Baku-APA. The Federal Reserve is keeping a key interest rate unchanged in light of global pressures that risk slowing the U.S. economy, APA reports quoting Associated Press.

As a result, Fed officials expect to raise rates more gradually this year than they had envisioned in December. The officials now foresee two, rather than four, modest increases in their benchmark short-term rate during 2016.

The Fed said Wednesday that the economy has continued to grow moderately but that the global economy and financial markets still pose risks. Offsetting the threats, the Fed said in a statement after a policy meeting that it foresees further strengthening in the job market.

At a news conference, Chair Janet Yellen said the Fed expects inflation, which has stayed persistently low, to reach the central bank's 2 percent target in two to three years.

Stock investors seemed pleased by the Fed's expectation of a more gradual pace of rate increases. The Dow Jones industrial average, which had been up slightly before the Fed's statement was issued, closed up 75 points. The yield on the 10-year Treasury note fell to 1.92 percent from 1.97 percent.

Global benchmark Brent oil price climbed above $40 per barrel, while American benchmark reached $38. The Euro gained against the dollar -- moving from 1.1088 to 1.1170 after the Fed’s announcement.