Fed Signals It’s on Track to Raise Interest Rates in December zz# Stock
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WASHINGTON — The Federal Reserve on Wednesday continued its slow march
toward higher interest rates, signaling that it remains on track to raise
its benchmark interest in December for the first time this year but holding
off on an increase this month.
After a two-day meeting of its policy-making committee, the Fed delivered
the expected news that it would not adjust rates during the final days of a
contentious presidential election. But the Fed’s post-meeting statement
reinforced expectations that Fed officials do not plan to wait much longer.
“The committee judges that the case for an increase in the federal funds
rate has continued to strengthen but decided, for the time being, to wait
for some further evidence of continued progress toward its objectives,” the
Fed’s policy-making committee, the Federal Open Market Committee, said.
The language was carefully calibrated to go just a little further than the
Fed’s statement after its previous meeting in September.
The Fed’s assessment of economic conditions was also just a little more
upbeat than the September statement. The most significant change reflected
evidence of stronger inflation. The November statement said inflation “has
increased somewhat,” rising closer to the Fed’s preferred annual pace of 2
percent.
The health of the economy has continued to improve. The unemployment rate
stood at 5 percent in September, close to a historically normal level.
Inflation rose 1.2 percent over the 12 months ending in September, up from 0
.8 percent during the 12 months ending in July. And the economy expanded at
an annual pace of 2.9 percent in the third quarter.
toward higher interest rates, signaling that it remains on track to raise
its benchmark interest in December for the first time this year but holding
off on an increase this month.
After a two-day meeting of its policy-making committee, the Fed delivered
the expected news that it would not adjust rates during the final days of a
contentious presidential election. But the Fed’s post-meeting statement
reinforced expectations that Fed officials do not plan to wait much longer.
“The committee judges that the case for an increase in the federal funds
rate has continued to strengthen but decided, for the time being, to wait
for some further evidence of continued progress toward its objectives,” the
Fed’s policy-making committee, the Federal Open Market Committee, said.
The language was carefully calibrated to go just a little further than the
Fed’s statement after its previous meeting in September.
The Fed’s assessment of economic conditions was also just a little more
upbeat than the September statement. The most significant change reflected
evidence of stronger inflation. The November statement said inflation “has
increased somewhat,” rising closer to the Fed’s preferred annual pace of 2
percent.
The health of the economy has continued to improve. The unemployment rate
stood at 5 percent in September, close to a historically normal level.
Inflation rose 1.2 percent over the 12 months ending in September, up from 0
.8 percent during the 12 months ending in July. And the economy expanded at
an annual pace of 2.9 percent in the third quarter.