The Federal Reserve voted Wednesday to continue to leave short-term rates alone, but hinted that a raise is still likely before the end of the year.
Fed Chair Janet Yellen offered an upbeat report about a strengthening economy, while still acknowledging the sluggish first half of the year. Employment is increasing and household incomes are too, she said. While the case for raising rates has strengthened, Yellen said there was no need to raise rates quite yet because inflation remains below the Fed’s 2 percent target.
“We judged that the case for an increase had strengthened but decided for the time being to wait for continued progress toward our objectives,” Yellen said at a press conference following the Fed’s policy meeting.
Source: “Fed Stands Pat, But Says Case for Rate Increase Has Strengthened,” The Wall Street Journal (Sept. 22, 2016) and “Why Housing Doesn’t Care About the Fed,” CNBC (Sept. 21, 2016)