Fed keeps benchmark interest rate unchanged, but signals rate cuts in future
The U.S. Federal Reserve has kept interest rates unchanged,... but hinted at rate cuts in the future.
This comes as the U.S. economy continues to face uncertainties such as the ongoing trade tensions with China.
Our Ko Roon-hee reports.
The Federal Reserve held its benchmark interest rate steady on Wednesday at a range of 2-point-25 to 2-point-5 percent.
The key interest rate, which has remained unchanged since December last year, affects various consumer rates such as those for credit cards and mortgages, and the interest paid to savers.
The Fed said the U.S. labor market remains strong and economic activity is moderately increasing.
However, the Fed pointed to uncertainties coming from slower global economic growth and trade conflicts...signaling possible cuts in the future.
"In light of increased uncertainties and muted inflation pressures we now emphasize that the committee will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion with a strong labor market and inflation near its 2% objective."
The Fed also dropped a reference to being "patient" about adjusting rates in its statement, which is another signal for cutting rates for the first time in more than 10 years.
The decision to freeze the rate was approved by a 9-1 vote.
James Bullard, president of the Fed's St. Louis regional bank disagreed saying the Fed should begin cutting rates now.
It marked the first disapproval since February last year.
Since 2015,... the Fed has raised rates nine times,... and it hiked them four times last year alone.
Some analysts predict the Fed will wait until September to announce a rate cut...while others predict none will happen this year if Washington and Beijing agree on a trade deal in the near future.
The Fed's announcement comes despite President Trump heaping political pressure on the Fed to cut rates... as he seeks to bolster his 2020 re-election campaign, which is sharply focused on economic prosperity in the U.S.
After Bloomberg reported that the White House had explored the possibility of legally demoting the Fed Chairman, Powell said he thinks the law is clear that he has a four-year term...and he fully intends to serve it.
South Korea's central bank also kept its benchmark interest rate unchanged at 1-point-75 percent in May...leaving the difference between Seoul and Washington's rates at 0-point-5 to 0-point-75 percentage points.