The US Federal Reserve has held interest rates steady and signaled borrowing costs are likely to remain unchanged indefinitely.
Moderate economic growth and low unemployment are expected to continue through next year’s presidential election, it said.
The decision by the Fed’s rate-setting committee left the benchmark overnight lending rate in its current target range between 1.5% and 1.75%.
New economic projections showed a solid majority of 13 of 17 Fed policymakers foresee no change in interest rates until at least 2021. The other four saw only one rate hike next year.
Notably, no policymakers suggested lower rates would be appropriate next year, a sign the Fed feels it has engineered a “soft landing” after a volatile year in which recession risks rose, the US bond yield curve inverted, and trade policy disrupted markets.
In the midst of an ongoing US-China trade war, Fed policymakers said they would continue monitoring “global developments” in deciding whether interest rates need to change.
They also said they would keep an eye on “muted inflation pressures,” a reflection of concern that the pace of price increases has failed to hit the central bank’s target.
The quarterly economic projections showed little change from those in September, as policymakers sketched out an economy they feel has skirted recession risks and is poised to grow close to trend for several years more.
Gross domestic product at the median is projected to grow 2% next year and 1.9% in 2021.
Unemployment is seen staying at its current level of 3.5% through next year, rising to only 3.6% in 2021.
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